Pawar asks PM to ensure stable agri export policy

Agriculture Minister Sharad Pawar has written a letter to Prime Minister Manmohan Singh, urging him to maintain a stable policy environment for the export of agriculture products, in the interest of farmers and the general economy.

His letter comes in the wake of talks of a curb on export of farm commodities such as onions to check domestic prices.

Officials said Pawar in his communique, which has also been sent to Finance Minister P Chidambaram and Commerce Minister Anand Sharma, has said sudden policy changes in knee-jerk reactions to domestic price situations create an environment of uncertainty and cause unintended distress to farmers.

Pawar said onion exports had remained at 1.5 million tonnes since 2006-07, despite an increase in production from 8.9 million tonnes to 16.6 mt during the same period, clearly showing it was not exports which caused volatility in domestic prices.

"Exports serve to stem volatility and it is abrupt changes in policy which cause prices to react disproportionately," the minister said.

The agriculture minister said that because of a stable policy environment adopted in the last two years, exports of agriculture products had almost doubled from Rs 1.20 lakh crore in 2010-11 to a record 2.32 lakh crore in 2012-13. India had emerged as a major exporter of rice, cotton, bovine meat, marine products, oilmeals and guar gum.

Discarding the theory that large-scale exports had resulted in a rise in domestic prices of some commodities, the agriculture minister wrote the record export of 2012-13 constituted less than 10 per cent of the total domestic production of wheat, rice, onions, sugar etc and did not pose any threat to food security, but instead gave incentive to farmers to increase production and productivity due to integration with international markets.

He gave the example of cotton, where despite apprehension from the textile ministry, free exports in the last two years had resulted in stable domestic prices. According to an internal assessment done by the agriculture ministry, the share of agriculture exports in India's total exports had risen from 10.22 per cent in 2008-09 to 13.08 per cent in 2012-13 and is now valued at Rs 232,000 crore.