Pink and saffron

Meat exports are a major driver of farm sector

Statements by Bharatiya Janata Party (BJP) leader Narendra Modi on the subject of meat production have put agricultural exports back on the radar even in the middle of election season. According to data, the overall growth in agricultural exports has outstripped that in non-agricultural items in recent years. However, this trend won't last unless stable agricultural export policies are put in place and farm marketing is suitably reformed. Data from the commerce ministry indicate that high growth in farm exports since 2010-11 led to a rise in the share of agricultural commodities in India's overall exports to above 10 per cent from about seven per cent earlier. However, the composition of the agricultural export basket and policy uncertainties make the sustainability of this good run look doubtful.

Much of this growth has come from foodgrain, on the back of monsoon-driven successive bumper harvests and release of stocks from government stores. But meat and guar gum are among the other major growth drivers. Foodgrain exports, which have made India the world's largest exporter of rice and the second-largest exporter of wheat, are dependent entirely on official policies, which in turn are guided by knee-jerk reactions to spot situations rather than a long-term vision. Wheat exports - which were allowed after a long hiatus to prune the unmanageable government inventories - did well largely because of supply disruptions as a result of crisis-ridden Ukraine and smaller crops in several major exporting countries. Once these conditions change, wheat exports may dwindle. In rice, much of the surge has been in the basmati category, where increased cultivation of extra-long grained scented varieties has helped increase market share. However, now, Pakistan is also beginning to grow such varieties. In any case, promoting exports of high-volume, low-value crops, such as wheat and rice, is ill advised for India, where land and water are scarce.

Shifting the focus to meat exports should be one of the solutions. Meat exports have grown spectacularly, thanks largely to a sharp rise in shipments of buffalo meat. However, these exports have already become an election issue. The front-running contender to power, the BJP, seems inimical to encouraging meat exports - even though 80 per cent of these are of buffalo meat, which carries no religious taboo. What is also being disregarded is the fact that meat exports have been allowed since the late 1960s and continued even when the BJP-led National Democratic Alliance was in power. Needless obstacles to setting up modern slaughterhouses will bode ill for this sector and for farm growth. Likewise, the prospects of the export of other livestock products - notably dairy products - are dicey, given the dip in domestic inventories and rising global supplies.

The onus of maintaining the growth momentum in farm exports will, therefore, rest with the incoming government after the polls. It will need to evolve a long-term farm export policy aimed specifically at diversifying the export basket and allowing the exporters to nurture their destination markets. Additionally, it will have to help exporters shore up the sanitary and phytosanitary standards as well as improve overall quality of export products. Consignments of rice, shrimps, groundnuts and milk products are often rejected at the destination ports on these considerations. These issues need to be addressed to maintain the tempo of agricultural exports.