{"id":186005,"date":"2022-05-23T20:59:28","date_gmt":"2022-05-23T15:29:28","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=186005"},"modified":"2022-05-23T20:59:28","modified_gmt":"2022-05-23T15:29:28","slug":"can-agri-exports-be-made-more-sustainable","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/can-agri-exports-be-made-more-sustainable\/","title":{"rendered":"Can agri-exports be made more sustainable?"},"content":{"rendered":"\n

News: <\/strong>In the fiscal year 2021-22 (FY22), agri-exports scaled an all-time high of $50.3 billion with registering a growth of 20% over the preceding year. For example, India\u2019s exports constituted 41% of a global rice market of 51.3 MMT.<\/p>\n

What were the driving forces?
\n<\/strong>This was made possible largely by rising global commodity prices<\/strong>. In addition, there were other driving forces like favourable<\/strong> and aggressive export policy <\/strong>of the Ministry of Commerce and its various export promotion agencies like APEDA, MPEDA, and commodity boards.<\/p>\n

The composition of India\u2019s Agri-exports<\/strong><\/p>\n

Among the several agri-commodities exported in FY22, rice ranks first, followed by marine products, sugar, spices and bovine (buffalo) meat.<\/p>\n

How sustainable is this growth in agri-exports? <\/strong><\/h5>\n

Given India\u2019s resource endowments and the country\u2019s domestic needs<\/strong>, the government has already banned wheat exports<\/strong>.<\/p>\n

Of the Agri-export commodities, two commodities, rice and sugar, are water guzzlers<\/strong>. This issue poses a challenge to their global competitiveness <\/strong>as well as their environmental sustainability<\/strong>.<\/p>\n

The case of rice:<\/strong><\/h5>\n

When most of the other commodity prices were surging in global markets, the price of rice collapsed by about 13%, largely due to India\u2019s massive exports. This means that India had to export a greater quantity of rice<\/strong> to get the same amount of dollars. This is not in India\u2019s economic interest.<\/p>\n

Another concern is that a substantial part of its global competitiveness comes from highly subsidised water<\/strong>, power<\/strong> and fertilisers <\/strong>that go into its production.<\/p>\n

The rice export led to a virtual export<\/strong> of India\u2019s water<\/strong> because rice crop is another water guzzler <\/strong>crop.<\/p>\n

The Case of Sugar<\/strong><\/h5>\n

The sugar export led to a virtual export<\/strong> of India\u2019s water<\/strong> because Sugar crop is another water guzzler <\/strong>crop.<\/p>\n

The sugar industry receives a number of subsidies (including export subsidy<\/strong>). These subsidies have crossed the 10% limit mandated by the WTO. Therefore, India lost the sugar case <\/strong>in the WTO.<\/p>\n

Others<\/strong><\/p>\n

The non-basmati rice was exported at a price which was lower than the MSP of rice. This might have been the result of leakages<\/strong> and divergence in the PDS<\/strong> and PM Garib Kalyan Anna Yojana (PMGKAY).<\/strong><\/p>\n

India exported at least 62 billion cubic meters of virtual water. Much of this water is extracted from groundwater in Punjab<\/strong> and Haryana<\/strong> belt (for rice), and in Maharashtra<\/strong> and Uttar Pradesh<\/strong> for sugar. This can lead to a water disaster.<\/p>\n

The rice production systems contribute to 17.5% of GHG emissions generated from agriculture (2021). This is among the most important sources of anthropogenic methane emissions<\/strong>,<\/p>\n

Way Forward<\/strong><\/h5>\n

In accordance with trade theory,<\/strong> the optimal export tax of 5 to 1% must be levied. Further, India should optimally not go beyond 12 to 15 MMT of rice exports, else the marginal revenue from exports will keep falling.<\/p>\n

The upcoming environmental disaster<\/strong> can be tackled if farmers are supported smartly. They should be given aggregate input subsidy support<\/strong> on a per hectare basis and the input prices of fertilisers<\/strong> and power <\/strong>should be allowed to be determined by market forces and their costs of production.<\/p>\n

Innovative farming practices such as alternate wetting drying (AWD), direct seeded rice (DSR), and <\/strong>micro-irrigation should be promoted. They can save up water and reduce the crop\u2019s carbon footprint<\/strong>.<\/p>\n

The farmers should be incentivised to switch some of the area under rice<\/strong> and sugar cultivation<\/strong> to other less water-guzzling crops<\/strong>. For example, Haryana has launched Mera Pani, Meri Virasat<\/strong> for incentive farmers to switch from paddy to alternate crops and Kheti Khaali,\u00a0Fir\u00a0Bhi Khushali<\/strong> Scheme to give money to farmers if they \u00a0do not grow any crop during the kharif season.<\/p>\n

It is high time that the government can introduce the option of direct cash transfers<\/strong> in lieu of almost free grains under the PDS and PMGKAY. This will help plug leakages as well as save costs. The savings can be used for better diversification<\/strong> of our food systems, better use of scarce water and other practices that lower GHG emissions, and saving on burgeoning food and fertiliser subsidies.<\/p>\n

Source<\/strong>: The post is based on an article \u201cCan Agri-exports be made more sustainable<\/strong>\u201d published in the Indian Express<\/strong> on 23rd<\/sup> May 2022.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

News: In the fiscal year 2021-22 (FY22), agri-exports scaled an all-time high of $50.3 billion with registering a growth of 20% over the preceding year. For example, India\u2019s exports constituted 41% of a global rice market of 51.3 MMT. What were the driving forces? This was made possible largely by rising global commodity prices. In… Continue reading Can agri-exports be made more sustainable?<\/span><\/a><\/p>\n","protected":false},"author":10328,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[216,10500],"class_list":["post-186005","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-3","tag-indian-express","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704905685},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/186005","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10328"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=186005"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/186005\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=186005"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=186005"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=186005"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}