An increase in agricultural exports is welcome, but obstacles to growth remain

- India's agricultural exports touch ૪ 21.4 billion during FY21, showing growth of 20%

Industry has been severely affected by the Koro crisis, although the agricultural sector and its exports have seen unexpected growth. During FY 2021, India's agricultural exports have touched ૪ 21.5 billion, an increase of 30 per cent over the previous fiscal, during the Corona crisis. However, the question is how long this export growth rate will be maintained in the agricultural sector which has shown such high export growth in the Corona era. For this we need to understand the agricultural export structure and remove the obstacles in it.

The central government has set a target of કુલ 20 billion in total exports by 203. Compared to which, the agricultural exports of the financial year 2021 are much less. Last year, the country's largest exporter was rice, with 1.6 million tonnes valued at 4.5 billion. This is followed by મર 3 billion in marine products, ૪ 6 billion in pepper and spices, and ૮ 4.5 billion in sugar. In which rice and sugar raise concerns about competitiveness and environmental sustainability, as both the above crops are used extensively for irrigation as well as massive subsidies through cheap fertilizers and free electricity. So sugar exporters are also forced to subsidize to dispose of excess quantities. Angered by this, many sugar exporting countries like Australia, Brazil, Thailand have taken a stand against India in the WTO.

With increasing exports of rice and sugar, our main concern is on the stability front. India is a water-scarce country, where the per capita water availability was 15 cubic meters in 2011 and is expected to fall to 1,150 cubic meters by 2020. One kg of sugar actually contains about 2000 liters of water. Thus, exporting 4 lakh tonnes of sugar means exporting at least 12 billion cubic meters of water.

If we take a closer look at agri-exports, we can see that India's agri exports have declined during the seven years of the Modi government from ૪૩ 2.8 billion in FY17, to a surplus of ૮ 2.8 billion in agri-trade that year. Even at a time when the Indian agricultural sector was the most globally integrated, and agribusiness touched 20 per cent of agri-GDP, which fell to 12.5 per cent at the end of FY 2021, it shows that India is less competitive in exports. And imports are becoming more protectionist.

India needs to develop a visionary strategy for sustainable exports along with the development of the agricultural sector. The objective of this far-sighted strategy is to reduce water emissions and protect water resources while keeping tariffs low.

A more detailed assessment of non-basmati rice exports reveals an interesting fact that these exports are in fact not only below the minimum support price but also below the country's average market price. The fare from the marketyard to the port and the loading charge at the port are then adjusted.

Now is the time for policy makers to reconsider all aspects of the rice and sugar system, from their MSP, FRP to production and procurement. Maximum production should be ensured on each drop of water. In the case of rice, procurement has to be limited to the public distribution system and the time has come to introduce the option of direct cash transfer under the public distribution system.