High agri imports under govt lens

Dept of commerce seeks ideas to curb import dependence for supply of commodities, writes to sector bodies

Faced with a burgeoning trade deficit due to rising import, the ministry of commerce has identified nine agricultural commodities of which annual import constitutes more than $100 million each for action in this regard.

The commerce ministry initiative is following a directive from the Prime Minister’s Office (PMO).

It has written to the respective sector councils and associations, seeking ways to reduce such imports. The nine commodities are vegetable oils, pulses, fresh fruits, cashew, sugar, alcoholic beverages, processed items, cocoa products and sesame seeds.

One such letter, addressed to the chairman of the Agricultural & Processed Food Products Export Development Authority (Apeda) and industry bodies such as the Solvent Extractors' Association of India (SEA) and Indian Oilseeds Produce and Export Promotion Council, reads: "There is a directive from the Prime Minister's Office on institutionalising import appraisal and reducing import dependence. Department of commerce is required to prepare a policy paper containing strategy, goal, road map and outcome for reducing (such) unwarranted dependence. It has been decided that import items of a value more than $100 mn may be analysed in the first instance."

Edible oil leads the agri commodities' import basket with a 60 per cent share. Pulses (15 per cent), fresh fruits (10 per cent), cashew (six per cent) and sugar (three per cent) also contribute.

India's annual consumption of edible oil is estimated at 19.5 mn tonnes, of which around 60 per cent is met through import, largely from Indonesia and Malaysia. The dependence on imported pulses is 18 per cent of the total 20 mt of annual consumption. The import bill for edible oil was $7,250 mn in 2013-14 ($9,851 mn in 2012-13). Pulses worth $1,828 mn was imported in 2013-14, compared with $2,450 mn the previous year.

“To check import of vegetable oils, we should increase domestic production of oilseeds. At 1,000-1,100 kg per hectare (ha), oilseeds production is half of the global average. Since India’s strength lies in soybean and cotton seed, their production should be increased at least by 50 per cent in the next five years,” said Vijay Data, president of SEA.

It also recommends introduction of genetically modified oilseeds for cultivation.

India is also a major importer of fresh fruits and juices to the tune of $1,273 mn (in 2013-14, versus $1,138 mn the previous year).

“The only way to contain import is to increase domestic production. Apart from focus on increasing productivity, we need to concentrate on reducing post-harvest loss and to increase cold storage capacity. Attempts made in the last two Plan periods have resulted in an increase in pulses production by three mt to 17 mt (yearly) now. That efforts need to be continued to make India self reliant in pulses in the next five-six years,” said Santosh Sarangi, chairman of Apeda.

For this, we needs to invest immensely on research and development. According to Bimal Kothari, vice-president of India Pulses and Grains Association, our average yeild of pulses is one of the lowest in the world.

Abinash Verma, director-general of India Sugar Mills Association, wants import duties raised to stop a supply glut.