Stable trade policy needed to boost agri exports: Draft policy

Stable trade policy regime, reforms in the APMC Act, streamlining of Mandi fee and liberalisation of land leasing norms are some of the key recommendations of the draft agriculture export policy, which seeks to double the shipments to over USD 60 billion by 2022.

The draft policy has also pitched for greater involvement of states, improvement in infrastructure and logistics and promotion of R&D activities for new product development for the upcoming markets.

It said the 'National Agriculture Export Policy' is formulated in line with the vision to double the farmers' income and increase the share of agricultural exports from present about USD 30 billion to over USD 60 billion by 2022.

It also aims to boost high value and value added agricultural exports, focusing on perishables; to provide an institutional mechanism for tackling market access barriers and deal with sanitary and phytosanitary issues; and to become one of the top 10 exporting countries of agricultural products and strive to double India's share in world agri exports.

Elaborating on the stable trade policy regime, it said that given the domestic price and production volatility of certain agricultural commodities, there has been a tendency to utilise the policy as an instrument to attain short-term goals of taming inflation, providing price support to farmers and protecting the domestic industry.

It said such decisions may serve the immediate purpose of maintaining domestic price equilibrium, but they end up distorting India's image in international trade as a long term and reliable supplier.

It is imperative to frame a stable and predictable policy with limited state interference to send a positive signal to the international market, it said.

"...changes in export regime on ground of domestic price fluctuations, religious and social belief can have long-term repercussions. This is particularly important for commodities such as onions, rice, wheat, oilseeds, pulses and sugar," it added.

The agri export policy, it said, is aimed at providing a policy assurance that the processed agricultural products and all kinds of organic products will not be brought under the ambit of any kind of export restriction such as imposing minimum export price, export duty and ban.

The draft policy also said that monopoly of the Agricultural Produce Market Committee (APMC) prevents private players from setting up markets and investing in market infrastructure.

APMC across states have not been able to achieve the farmers' welfare envisaged in these acts.

"Efforts will continue with state governments to remove perishables from their APMC Act. State governments would also be urged to standardize/ rationalize mandi taxes for largely exported agricultural products," it added.

Simplification or uniformity of mandi/agricultural fee across states will create a transparent supply chain that will empower the farmer, provide him wider access to markets and enable free trade across the country, it said.

The policy made a string case for promoting contract farming as it would help in attracting investments.

To promote infrastructure and logistics boost, it suggested that a comprehensive need-gap analysis of existing export oriented infrastructure across the value chain is critical to formulating an export oriented policy.

It also said that as global bodies like US FDA and European Food Safety Authority are empowered to frame, regulate and implement policies related to both agricultural production and trade, it "may be worthwhile to work towards similar agencies in India".

Further the draft policy said that there is a need to ensure greater interaction between the various research organizations and industry bodies which will enable the research bodies to work on industry specific requirements.

"It is proposed that the agricultural export policy must focus on promotion of value added, indigenous and tribal products," it said adding development of organic export zones/organic Food park with an integrated approach would help promote shipments.

As part of effort towards establishing a strong quality regime, it said the focus will be on strong R&D, new varieties, state of the art lab for effective accreditation and monitoring.

It said the policy aims at addressing a whole range of issues which could potentially propel India into the top bracket of agricultural exports.

The Department of Commerce has sought views of the stakeholders on the draft till April 5.