Challenges facing agriculture exports from India

Source: The post challenges facing agriculture exports from India has been created, based on the article “What we need is a farmer–friendly agri–export policy” published in “Indian express” on 13th May 2024.

UPSC Syllabus Topic: GS Paper 3-Agriculture – Marketing of agricultural produce.

Context: The article discusses the decline in India’s agricultural exports, which fell short of the government’s target. It explains that government policies, global prices, and trade restrictions have impacted exports. Challenges facing agriculture exports from India

For detailed information on How India’s agricultural exports fell read this Article here

What is the current state of India‘s agricultural exports?

The target for agricultural exports set by the Indian government was $60 billion in 2022. However, in 2023-24, exports only reached $48.9 billion, marking an 8% decline from $53.2 billion in the previous year.

Between 2004-05 to 2013-14, agricultural exports grew by almost 500%, from $8.7 billion to $43.3 billion. However, growth has slowed significantly Between 2014-15 to 2023-24, with only a 1.9% annual growth rate.

The main exports include rice ($10.4 billion), marine products ($7.3 billion), spices ($4.25 billion), bovine meat ($3.7 billion), and sugar ($2.8 billion).

What Factors Affect India‘s Agricultural Exports?

Global Market Prices: When global prices rise, Indian exports increase. For example, during the high growth phase, high global prices led to a surge in exports.

Domestic Export Policies: Restrictions and bans on commodities like wheat, rice, sugar, and onions affect exports. For instance, after banning wheat exports in May 2022 and imposing restrictions on rice and sugar, there was a notable impact on trade volumes and values.

Economic Measures: Imposing duties such as the 20% duty on non-basmati rice exports affects the export competitiveness and pricing in international markets.

What should be done to improve farmer incomes and make agriculture more competitive globally?

Modify Export Policies: Implement optimal export taxes instead of bans, such as a suggested 15% duty on rice. This approach helps balance domestic supply with export potential.

Invest in Agriculture: Invest in agricultural research and efficient farming practices like precision agriculture. These investments reduce costs and improve competitiveness.

Address Ecological Impacts: Focus on sustainable farming to preserve resources, particularly water, as rice cultivation is notably water intensive.

Rebalance Policies: Adjust policies like the high minimum export prices for onions, which currently disadvantage farmers, to better support farmer incomes and make domestic and export markets more equitable.

Question for practice:

Examine the factors contributing to the decline in India’s agricultural exports and propose strategies to improve farmer incomes and enhance global competitiveness.