Agriculture export policy, 2018

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India is a country which is acknowledged for the variety of materials exported across the globe. The nation is among the world’s leading producer of perishable goods; the agriculture sector stands as a pillar for the economy as the largest share of the gross domestic product is contributed by this sector. India is a unique country with a population of 1.3 billion, the preponderance segment of the population depends on agriculture sector for livelihood; The main objective behind the formulation of Agricultural Export Policy is to encourage producers to produce more amount of agricultural products which can be exported to other nations across the globe and hence increase the gross domestic product and double farmers’ income by 2022.

The Union Cabinet under the chairmanship of Honorable Prime Minister approved the Agriculture Export Policy in the year 2018. Exports of agricultural products would play a pivotal role in the growth of the economy; to provide growth in agricultural exports, the Government has come out with a comprehensive policy aimed at augmenting the agricultural exports and connecting Indian farmers and agricultural products with the global market.

All strategies related to the agriculture sector in India are planned and actualized by an intricate arrangement of organizations. State legislature plays a significant role in formulating policies in respect of agriculture sector, but the central government has an upper hand when it comes to the policies which affect the country at whole; funds are allocated by the central government to the state government for the development of each and aspect of the society. At the central level, while the Ministry of Agriculture and Farmers’ Welfare has responsibility for agricultural policy, many other ministries and agencies have important roles. There is, therefore, significant risk of fragmentation, overlapping and unclear attribution of responsibilities.

The main and broad objectives are as follows:

  • Firstly, to increase the exports and reach US $ 60 plus billion by the year 2022.
  • To diversify the exports in the terms of a variety of supplies, to target as many markets possible and enhancement of international relations and boosting the economy.
  • To promote novel, indigenous, organic, ethnic, traditional and non-traditional products across the global channels.
  • To strive to double India’s share in agricultural exports by integrating with the global value chain at the earliest and enable farmers to explore international markets.

Salient features

The above-mentioned policy has some salient features, categorised under two heads; Strategic and operational, the explanation of the said heads is as follows-

Strategic features-

  1. Policy measures: Under this salient feature, both the public and private stakeholders highlighted the amendments which were necessary to increase exports of the country; the ambit of this measure in quite broad and further include general and commodity-specific measures. This feature is imperative for the overall growth of the economy as it covers both private and public stakeholders.
  2. Infrastructural logistics: Good infrastructure irrespective of any field adds value to the business; the main reason behind having a good infrastructure is smoothness in trade facilitation. Infrastructure in agricultural business involves pre-harvest and post-harvest handling facilities, storage & distribution, processing facilities, roads and world class exit point infrastructure at ports facilitating swift trade. Agricultural exports are determined by supply side factors, food security, processing facilities, infrastructure bottlenecks and several regulations. This involves multiple ministries and state departments. Strategic and operational synergy across ministries will be key to boosting productivity and quality.
  3. Holistic approach to boost exports: the said policy will promote the organizations with reference to agricultural production to make take necessary steps to promote exports on international platform.
  4. Greater involvement of State Governments in Agriculture Exports: Every state government can formulate agriculture policies according to their suitability. The Central Government make policies for the whole country and thus have an upper hand when it comes to formulation of policy.

Operational features-

  1. Focus on clusters: There is a need to develop and set up an institutional system for powerful inclusion and commitment of little and medium farmers for a whole worth chain as gathering enterprise(s) inside the bunch of towns at the square level for select produce(s). This will assist with acknowledging real advantage and strengthening of the cultivating network to twofold their pay through the whole worth chain.
  2. Promoting value added exports: Promotion of a product impacts the sale of the product. The government aims to promote indigenous products at an international platform to attract more foreign investment and increase the export of the Indian farmers. The government also encourages for new products and hence placing importance to research and development.
  3. Marketing and Promotion of Brand India: A product when represented at an international platform represents the whole country; the government promotes products with good quality and set standards in accordance with those qualities.
  4. Attract private investments into production and processing: The agriculture export policy, recently drawn up by the Ministry of Industry & Commerce, is poised to add momentum to this pace of growth. Designed with the aim of easing trade restrictions, establishing clusters, encouraging small businesses and private sector participation, it is poised to shape a more stable regime.
  5. Establishment of Strong Quality Regimen: The role of FSSAI, EIC, plant and animal quarantine and different Commodity Boards in setting standards, enforcing such standards and a robust accreditation and certification arrangement to identify export worthy establishments will be facilitating further exports. As the major focus of our country is towards setting up of a quality system for smooth governance, the centre will focus more on research and development.

Constitutional basis

Under the Constitution agriculture is a state subject; the central government formulates a plan on one ground that this subject is of national significance. The central government both acts as a policy-making authority and policy implementing authority. The Indian Constitution has provided the state with the powers to delegate in certain matters. Every state gets fund to raise and improve the standards of the occupation. As government both at central level and state level are involved it results in complexity at times; these policies are not only central or state subject, they also involve other ministries and local government (herein referred as Panchayat). From 1950 until 2014 India’s Planning Commission, a senior body chaired by the prime minister, outlined national plans and policy priorities.

In the year 1951, the first five-year plan was launched with to rehabilitate refugees, agricultural development, and self-sufficiency in food along with controlling inflation; till the year 2015, a chain of these plans were in operation. Planning Commission was replaced by the National Institution for Transforming India (NITI) Aayog in the year 2015; NITI Aayog aims to foster great involvement of government at the state level. The last five-year plan was the 12th plan and served for a period from 2012 to 2015.

Constitution of India rests powers and responsibilities in the hand of Finance Commission of India regarding the balance between taxation power and expenditure responsibilities among the government at both central level and state level. The recommendations of the fourteenth Finance Commission cover a five-year period from 2015. The central government accepted the Commission’s recommendation about increasing the share of the states in the pool of central taxes that can be divided between the centre and the states, the so-called devolution of taxes (Government of India, 2016). This would give the states greater autonomy in designing and financing schemes according to local priorities.

Critical analysis                                                                              

The agriculture sector is important as 65% of this population is dependent on them for their livelihood, to regulate trade smoothly; the government on both state level and central level have to formulate policies. The objective behind the introduction of agriculture policy of 2018 is to double the income of the farmers by the year 2022. The consequent policy approach has evolved over a while; the said policy is targeting larger market strength. According to ministry during 2018-19* crop year, food grain production is estimated at record 283.37 million tonnes. In 2019-20, Government of India is targeting food grain production of 291.1 million tonnes. Milk production was estimated at 176.3 million tonnes during FY18, while meat production was 7.4 million tonnes. Such a large number of markets need to be regulated by a mechanism.

NITI Aayog, the policy “think tank” of the central government, provided in April 2017 an analysis of recent and projected expenditures. It suggested that expenditure on agriculture (including livestock, forestry, fishery, and rural development) could more than double from 2015-16 to 2019-20 in nominal terms. The food subsidy might increase by about 25%, while the fertilizer subsidy might decline slightly, in both cases taking into account better targeting of the expenditure. Since total expenditure by the central government (revenue and capital) might increase by about 58% between 2015-16 and 2019-20, the share of the food subsidy and particularly the share of the fertilizer subsidy in total expenditure might decline over that period.

The policy seeks to diversify the country export basket and destinations, by boosting high value and value- added agricultural exports, including focus on perishables. Currently, rice, meat and marine products account for more than 50 per cent of Indian agriculture exports. To accomplish this, the administration intends to give an institutional component that would seek after market get to, handle hindrances and manage sterile and phytosanitary issues that surface now and again.

Conclusion

The Policy targets tending to an entire scope of issues which might drive India into the top section of horticultural fares. It has frequently been perceived that Integration in the worldwide worth chain is one of the most certain techniques for embracing the best agrarian practices alongside accomplishing efficiency gains and cost intensity. The target of multiplying the rancher’s pay will perpetually require elevated levels of pay just as improving in the nourishment esteem chain.

The farming area in India is relied upon to create better energy in the following barely any years because of expanded interests in agrarian foundation, for example, water system offices, warehousing and cold stockpiling. Moreover, the developing utilization of hereditarily changed harvests will probably improve the yield for Indian ranchers. India is relied upon to act naturally adequate in beats in the coming barely any years because of deliberate endeavours of researchers to get early-developing assortments of heartbeats and the expansion in the least help cost.

Author: Pratyush Arora from The Northcap University, Gurugram.

Editor: Tamanna Gupta from RGNUL, Patiala.

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