Time to foster agri product exports
- India is the second largest producer of agriculture products in the world.
- Share of agriculture and allied sectors in gross value added (GVA) of India at current prices stood at 18.8 % in FY. 2021-22.
- Currently Export of agriculture Commodities rose to 16 percent in First half of 2022-23 [April to September].
- Two- third of total population of India is dependent on agriculture for their livelihood.
- Having such large production capacity, it important also to ensure that agri-exports remain sustainable over the long period of time.
Suggestion on how to improve India’s agri-export
- Focus on ‘product exports’ strategy
- India’s agri-export strategy is based on produce and sell known as commodity trading.
- However, it should be shifted from commodity export to product exports.
- Firms which are in the business of agriculture export should evaluate the demand for the product and what consumer want and accordingly make value-addition programme in their commodities.
- Example: Rather than exporting rice in bulk, the focus should be on creating smaller but targeted products segments such as
- Rice flour which is in high demand in Europe, especially the southern part.
- Broken rice, rather than being exported in bulk to western African markets, can be alternatively marketed as rice flour and as a mixture for pet foods.
- Rice starch is required by the pharmaceutical industry, and is also used as a thickener in sauces and desserts.
- Rice sweetener is used in sugar syrups and honey.
- Rice bran is in high demand as it is rich in Vitamin B6, iron and magnesium, and utilised in cereals, mixes, and vitamin concentrates.
- Rice bran oil can be promoted as a treatment for decreasing blood cholesterol.
- Product exports strategy will address the issues of storage of raw material, remunerative prices to farmer, shelf-life issues, food losses and waste.
- Focus on innovation
- Innovation can be used to add value to agri-products.
- This can be done by:
- Enhancing current processes, products and services or developing new ones.
- Promoting the industrial use of food products but only where we have non-utilisable surplus.
- Traditional crops can be turned into non-food goods using a number of inventive and innovative technologies such as bio-diesel.
- Successful value-added products are generally specialised/technical and sell in markets which have low competition.
- It is time to leverage policy interventions and bring in operational changes, including training and hand-holding of producers, for creating a business ecosystem for agri product exports.
- Focus on coordination
- There is need for improvement in coordination, between producers and marketers of agricultural products.
- This can be done by contract farming, contractual sourcing, production sharing agreement.
- Considering India’s small landholdings, horizontal coordination that aims to pool people or enterprises from the same level of the food chain is one solution.
- Review agri-export policy
- India’s agriculture export policy sometime chose export bans/restrictions and minimum export price and sometimes free trade. This approach needs to be reviewed.
A predictable and transparent agriculture export policy is the need of the hour to make India a reliable global supplier of value-added agriculture products, which will certainly contribute to the goal of doubling farmers’ income.
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