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India’s domestic agricultural policies are largely aimed at food security and price stabilization and often put export restrictions to control food inflation. Photo: Ramesh Pathania/Mint
India’s domestic agricultural policies are largely aimed at food security and price stabilization and often put export restrictions to control food inflation. Photo: Ramesh Pathania/Mint

FDA-like agency needed for agriculture: commerce ministry

Draft agri-export policy aims at doubling agri-exports to $60 billion by 2022

India needs to form a US Food and Drug Administration (FDA)-like agency to have an integrated approach to both agricultural production and trade, to double agri-exports to $60 billion by 2022 from $30 billion now, according to the draft agri-export policy released by the commerce ministry on Monday.

“It may be worthwhile to work towards a similar agency in India which is all encompassing in nature, covering both domestic and international market, so as to have a calibrated approach in export and imports," the report released for stakeholder consultation said.

Commerce minister Suresh Prabhu, who had announced the need for such a policy on his first day in office, had said that a stable agri-export policy is needed to fulfil Prime Minister Narendra Modi’s vision to double farm income by 2022.

India’s domestic agricultural policies are largely aimed at food security and price stabilization and often put export restrictions to control food inflation.

For example, the three-year (2008-11) ban on non-basmati rice exports to control retail inflation despite sufficient stocks led to a notional loss of $5.6 billion to the industry and forex losses to the government.

“Over the three years, 14.6 million tonnes of non-basmati rice could have been exported," the report said.

India’s agricultural exports basket is a diversified mix led by marine products ($5.8 billion), meat ($4 billion) and rice ($6 billion), which together constitute around 52% of its total agricultural exports. India’s share in global exports of agriculture products has increased from 1% a few years ago to 2.2 % in 2016.

The draft policy also advocated promoting export-oriented clusters and agriculture export zones (AEZs) in partnership with private exporters who will have a natural incentive to promote such clusters. This will be key to ensure surplus produce with standard physical and quality parameters which meet export demands.

“There are opportunities for developing agriculture export SEZs mainly aimed at producing agriculture commodities for certain countries which are largely dependent on import of agriculture products. The interest of some countries (having substantial gap in domestic availability of grains, vegetables and fruits) can be explored for bringing in foreign direct investment (FDI) into agriculture export SEZ in order to ensure food security of that country. There can be complete buyback arrangements by the countries which are bringing in FDI, thus providing a stable market for Indian exports," it added.

The commerce ministry has also sought to provide policy assurance to producers that processed agricultural and organic products will not be put under export restrictions such as minimum export price, export duty even when the primary agricultural product or non-organic agricultural product is brought under some kind of export restrictions to stabilise domestic prices.

The commerce ministry has provisionally identified 50 unique product-district clusters for export promotion. It has also shortlisted 10 commodities as focus items for specific farm, infrastructure and market intervention. They are shrimps, meat, basmati rice, bananas, pomegranate, vegetables including potatoes, cashew, plant parts/medicinal herbs in value added forms including herbal medicines, nutraceuticals, aromatics, spices (cumin, turmeric, pepper) and organic food.

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