Agriculture Export Policy 2018 1

Agriculture Export Policy, 2018

• 17 Dec 2018
• 7 min read

Last Updated: August 2022

What is Agriculture Export Policy?

• The Union Cabinet approved the agriculture export policy in 2018.

  • The Cabinet also approved the proposal for establishment of Monitoring Framework to oversee the implementation of Agriculture Export Policy.

• The policy looks to provide impetus to agricultural exports, it is aimed at doubling the agricultural exports and integrating Indian farmers and agricultural products with the global value chains
• It envisions making India global power in agriculture and raising farmers’ income through various policy instruments.

What are the Objectives of the Policy?

• To double agricultural exports from 30 billion dollars to 60 billion by 2022.
• To diversify export baskets, destinations and boost high value and value-added agricultural exports including focus on perishables.
• It looks to promote novel, indigenous, organic, ethnic, traditional and non-traditional Agri product exports.
• To provide an institutional mechanism for pursuing market access, tackling barriers and dealing with sanitary and phytosanitary issues.

What are the Elements of the Policy?

• Agriculture Export Policy has been organised in two categories – Strategic and Operational
  • Strategic Includes:
    • Policy measures
    • Infrastructure and logistics support
    • Holistic approach to boost exports
    • Greater involvement of State Governments in agri exports
  • Operational Includes:
    • Focus on Clusters
    • Promoting value added exports
    • Marketing and promotion of “Brand India”
    • Attract private investments into production and processing
    • Establishment of strong quality regimen
    • Research & Development
    • Miscellaneous

What is WTO’s Role in the Policy?

• All the measures proposed in the Agriculture Export Policy are compatible with World Trade Organisation norms.
• With India moving out of the income bracket of per capital gross national income of less than $1000, it is not allowed by the WTO to give any financial assistance or export SOPs.
• Therefore measures such as marketing and promotion and infrastructure building such as development of clusters are only considered in the policy.

What are the Benefits of Export Policy?

• India to Become a Reliable Partner: India’s agricultural trade policies are inconsistent with respect to guaranteed availability of produce for exports which makes India an unreliable trading partner, the policy would help India become a reliable partner.
• Foreign Exchange: It will help India in turning the unfavorable balance of payment as it will become an important source of foreign exchange.
• Crop Diversification: It will act as a catalyst for crop diversification which helps in averting crop failure, better price realization etc.
• Increase in Income: It will also result in social upliftment by increasing farm income.

What are the Challenges regarding the Policy?

• Prices in international market for food grain, sugar, cooking oil as well as dairy and meat products are very low leaving Indian products at disadvantage from their global peer.
• The current minimum support price (MSP) of wheat and rice make India’s food grain quite dear in the domestic market.
• Indian government is always “pro-consumer”, backing cheap imports to keep inflation in food prices low, hurting local producer.
• Farmers are not aware of the external factors like global price, quality standards etc. which makes them a poor choice as reliable suppliers.
• India’s farm produce suffers from poor customs and port infrastructure, and high logistics costs that cut into the exporters’ margins.

What can be the Way Forward?

• Effective Infrastructure: Effective cold chains can increase the exports of processed agricultural products, but government needs to put in money to push infrastructure.
• Need for Reforms: Limited state interference, reform of the Agricultural Produce Market Committee (APMC) Act, liberalization of land leasing norms etc. is required to make India a reliable supplier with continued stability.
• Availability of Funds: The government should ensure easy credit flow to the export sector, especially small exporters, to ensure adequate availability of funds to them.
• Formation of some Reliable Organisations: Trade promotion organisations can be setup at a strategic overseas location which can boost India’s paltry export to those nations.