Strong nine-month show may take India's farm exports past $50 bn in FY22

Country posted 20% in exports of agricultural and allied products, while exports of plantation crops rose 19% to $1.2 billion and those of marine products were up 35% to $6.18 billion

The stupendous performance of agriculture exports in the first nine months of this financial year has put the country on course to achieve its highest-ever farm exports of $50 billion in FY22.

In the first nine months of 2021-22, India registered a 20 per cent growth in exports of agriculture and allied activities. Exports of plantation crops rose by 19 per cent to $1.2 billion and exports of marine products were up 35 per cent to $6.18 billion.

India exported agriculture goods worth $40 billion in FY21 and the previous best in agriculture exports was $46 billion achieved several years back.

In 2018-19, India had unveiled a policy to achieve a target of $60 billion of agriculture exports by 2022.

If exports reach $50 billion by March 2022, it would mean that though India might have fallen short of the target, it is still a big achievement given that exports from the sector have usually been underperforming other sectors.

The bump in exports, a trend that started in FY21 despite the debilitating impact of the first wave of Covid-19, continued in the current financial year.

The spike has been driven largely by cereals (largely non-basmati rice and wheat), marine products, spices and sugar.

The traditional leaders of basmati rice exports could, however, remain subdued due to payment issues with Iran.

Basmati rice exports in FY22 till December 2021 were estimated to be about $2.38 billion, down almost 19 per cent from the previous year.

The leaders

Data shows that within the broader agriculture basket, the biggest rise in exports in absolute terms between April and December has been in non-basmati rice, (up 46 per cent to $4.48 billion), followed by coffee (up 43 per cent, $0.71 billion), and wheat (up 41 per cent, $1.43 billion). Sugar (up 61.33 per cent on a low base) and marine products (up 35 per cent) were other performers.

Exports of wheat and other cereals are notable as these crops usually don’t have very strong and regular markets.

“We already have achieved $41 billion of agriculture exports in FY21 and in the first nine months of FY22, exports have already crossed $33 billion. Therefore I see no reason why we should not reach the $50 billion target in FY22, and we might even top that as demand for several items such as spices, coffee, cereals, wheat and marine products remain robust,” Ajai Sahai, Director General of Federation of Indian Exporters Association (FIEO) told Business Standard.

Sahai said basmati rice exports too would have grown, but for the problems of payments from Iran.

Higher target

In 2018-19, the Central government unveiled an ambitious policy that seeks to double farm exports to $60 billion by 2022 and do away with arbitrary curbs on exports.

Aiming to push India into the list of the top-10 agri export nations, the policy has been backed by the Prime Minister’s Office.

The then Commerce and Industry Minister, Suresh Prabhu, had said while releasing the policy that it ties in logistics support, a better trade regime, and state-led product development to connect farmers to global markets.

“Each state will have a designated department for promotion of agricultural exports, apart from cluster-based development for specific commodities. We have also identified several sea ports to serve as gateways for specific agri exports,” Prabhu had said.

Although India occupies the pole position in global trade of these products, its total agri export basket still accounts for only a little over 2 percent of world farm trade, estimated at a massive $1.37 trillion.

The policy mandated that the government finalise a list of essential agro-commodities.

All commodities will face restrictions in the form of a minimum export price, export duty or revoked bans.

The government had estimated a total outlay of Rs 1,400 crore for agricultural exports. This would be done by merging a myriad group of agricultural export schemes and incentives.

More recently, a high-powered panel of experts said that in specific reference to rice exports that Centre needs to ensure that a higher pool of surplus rice is available to exporters by suitably modifying Food Corporation of India’s (FCI) procurement strategies.

The panel was constituted by the 15th Finance Commission (FFC) to suggest measurable performance incentives for States to encourage agriculture exports as well as to promote crops that can help in high import substitution.

Segment-wise export performance (In $ billion)

Export segment	Apr-Dec 2020-21	Apr-Dec 2021-22	% change
Plantation Crops

1.09 1.29 +19 Agri & Allied Activities 22.31 26.73 +20 Marine Products 4.54 6.11 +35 Total 27.94 34.13 +22.15

Source: Department of Commerce