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1. Draft Agriculture Export Policy

Background

  • India’s agri export basket accounts for little over 2% of world agri-trade (estimated at US$ 1.37 Trillion).

  • India is currently ranked ninth amongst the major exporters globally (WTO 2015).

  • Indian agricultural exports grew at 9% compared to China (8%), Brazil (5.4%) and US (5.1%) between 2007 and 2016.

  • The draft Policy seeks to double farmers’ income and increase the share of agricultural exports from around 30 billion USD currently to more than 60 billion USD by 2022.

 

Need of the Policy

  • Low export: India’s value added agri-produce in its agri-export basket is less than 15% compared to 25% in US and 49% in China.

  • Export rejections: Indian agriculture produce face more rejections in key export markets compared to products from other developing countries (ICRIER 2017).

  • Lack of Uniformity: India is unable to export its vast horticultural produce due to lack of uniformity in quality, standardization and its inability to curtail losses across the value chain.

  • Downward trend: Cotton, oilseeds, bovine meat and cereals which were country’s highest forex earner are showing a declining global trend in consumption and trade.

 

Draft Agri-Export Policy Framework

Strategic measures

  • Policy measures- It includes Stable Trade Policy regime free of ban or imposition of Minimum Export Price; reforms in APMC Act to remove perishables from its purview and streamlining of Mandi fee; Liberalising Land Leasing norms without compromising the rights of the land owner as provided in Model Contract Farming Act.

  • Infrastructure and logistic boost- includes port development having dedicated agri infrastructure at ports with 24x7 customs clearance for perishables, enhancing hinterland connectivity, better cargo handling etc.

  • Whole Government approach- The policy advocates a quality control at farm level and coordination across different ministries involving agri chain. This would address the issues of R & D for improved varieties, establishing standards regime, response to SPS & TBT barriers, identification of winning sectors etc.

  • Greater Involvement of state government in agri-export: by identification of a nodal State Department/Agency for promotion of agriculture export and including agricultural exports in State Export Policy along with development of product specific clusters in different agro climatic zones

 

Operational Measures

  • Focus on Clusters: The policy favours the establishment of Farmer Producer Organisation, digitization and geo-mapping of land records, identification of suitable production clusters coupled with a transition agri export zones (AEZs).

 

SHEFEXIL- SHELLAC and Forest Products Promotion Council

  • It is nodal Export Promotion Council for Non Timber Forest Produce, such as , Veg Saps & Extracts, Guar Gum, Sesame seeds, Herbs etc.

  • It is the nodal EPC for the North Eastern Region of India.

  • It is sponsored by Ministry of Commerce and industry.

  • Promoting Value Added Exports- This includes establishment of organic export zone/organic food park, branding of organic products, developing a uniform packaging and quality protocols standard for organic and ethnic products. Moreover, there should be financial support for the non-forest produce under SHEFEXIL.

  • Marketing and promotion of “Produce of India”- There should be a product specific market campaign and a separate fund for marketing of organic products, ethnic products, and GI products.

  • Post-harvest Infrastructure to ensure smooth logistical movement of produce – This include undertaking ease of doing business measures, developing sea protocol for perishables etc.

  • Establishment of a Strong Quality Regime- It includes establishment and maintenance of single supply chain and standards for domestic and export market, striving towards recognition of our conformity assessment procedures.

  • Other measures- include ensuring self-sufficiency and export-oriented production, creation of an agri-startup fund, formulating action plan on R&D, testing labs with strong infra in NE region to support export of organic produce, involving private sector in export promotion etc.

 

2. Farm Msp Models By Niti Aayog

​​Details

  • The three models are:

  • The market assurance scheme: It proposes procurement by States and compensation of losses up to certain extent of MSP after the procurement and price realisation out of sale of the procured produce.

  • Positive Impact of private procurement

  • It would reduce fiscal implications for the government

  • It will involve private entities as partners in agriculture marketing and improve the competition in the market.

  • It would also limit the government’s liabilities for storage and post procurement management & disposal are also avoided.

  • However, there are concerns that it may fail like earlier attempts because back-end facililties of storage and warehousing are handed over to them and they don’t have the wherewithal to purchase farm goods in bulk.

  • The price deficiency procurement scheme: Under this, if the sale price is below a modal price then the farmers may be compensated to the difference between MSP and actual price subject to a ceiling which would not exceed 25 per cent of the MSP. No compensation would be due if modal price in neighbouring states is above the MSP.

  • Madhya Pradesh is implementing this scheme as Bhawaawantar Bhugtaan Yojana (BBY) (refer January 2018 current affairs).

  • Private procurement and stockist scheme: Under this, procurement would be done by private entrepreneurs at MSP. The government would provide some policy and tax incentives to these entrepreneurs. The private player is nominated through a transparent bidding process by the state government.

  • States can adopt one or more options depending on their requirements. However, all the three options may not be implemented for the same crop.

  • Before finalizing any model, the government must also consider report of National Commission for Farmers (NCF) which had recommended that MSP should be at least 50% more than the weighted average cost of production.

 

MSP and procurement in India

  • Minimum Support Price is the price at which government purchases crops from the farmers, whatever may be the price for the crops.

  • In our country, MSP for certain agricultural commodities of Kharif and Rabi season are announced by the Cabinet Committee on Economic Affairs (CCEA), Government of India at the beginning of the sowing season based on the recommendations of the Commission for Agriculture Cost and Prices (CACP).

  • However, procurement by Central and State Agencies is limited to rice and wheat and some amount of coarse cereals. The Government also procures limited quantity of oil seeds and pulses through NAFED, SFAC and some other agencies.

March Indian Economy

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