FARM
EXPORTS – GEOGRAPHY
News: Department of commerce has released a
provisional data of the farm trade
What's
in the news?
●
Provisional data from the Department of
Commerce shows total farm exports at
$53.15 billion and imports at $35.69 billion during 2022-23, surpassing their
previous year’s records of $50.24 billion and $32.42 billion respectively.
Key
takeaways:
Decreased
agriculture trade surplus:
●
The resultant agricultural trade surplus
has marginally dipped from $17.82 billion to $17.46 billion.
●
The surplus narrows further if one adds
the import of fertilizers, which have risen from $14.17 billion in 2021-22 to
$17.21 billion in 2022-23.
Trend
in Agriculture Trade after 2013:
●
Between 2013-14 and 2015-16, exports
sharply fell from $43.25 billion to $32.81 billion. The basic driver was global
prices.
●
The UN
Food and Agriculture Organization’s Food Price Index (FPI) crashed from an
average of 119.1 points in 2013-14 to 90 points in 2015-16. However, imports
continued to rise, bringing down the farm trade surplus from a peak of $27.72
billion in 2013-14 ($21.46 billion net of fertilizer imports) to a low of $8.05
billion by 2016-17.
●
Two items whose exports had registered
substantial increases, only to falter in the last few years, are spices and buffalo meat.
Major
export contributors:
1.
Marine products:
●
Marine product exports have grown steadily
from $5.02 billion in 2013-14 to $8.08
billion in 2022-23.
2.
Rice export:
●
Rice exports have also gone up during this
period, from $7.79 billion to $11.14
billion.
●
Basmati
exports are mainly to the Persian Gulf countries and, to some
extent, the US and UK.
●
Non-basmati
shipments are more diversified, with the destinations spread
across Asia (Bangladesh, China, Sri Lanka, Malaysia, Vietnam, UAE and Iraq) and
Africa (from Senegal, Ivory Coast and Benin to Somalia and Madagascar).
●
It’s non-basmati that has made India the
biggest rice exporter, ahead of Thailand.
3.
Sugar export:
●
The boom in sugar exports has been more
recent – from a mere $810.90 million in 2017-18 to $1.97 billion in 2019-20,
$2.79 billion in 2020-21, $4.60 billion in 2021-22 and $5.77 billion in 2022-23.
●
Indian mills have built markets for both
raw sugar (among refineries in Bangladesh, Indonesia, Malaysia, Saudi Arabia
and Iraq) and regular plantation whites (in African countries, Afghanistan, Sri
Lanka and China).
●
The country has, in the process, emerged
as the second largest exporter after
Brazil.
4.
Spices export:
●
Spices exports jumped from $2.5 billion in
2013-14 to almost $4 billion in 2020-21.
●
It was led not by traditional plantation
spices such as pepper and cardamom, but by chilli, mint products, cumin,
turmeric, ginger, coriander, fennel and other seed spices.
5.
Buffalo meat:
●
Buffalo meat shipments have stagnated and have never regained their
peak of $4.78 billion reached in 2014-15.
6.
Cotton export:
●
Cultivation of genetically-modified Bt cotton and high global prices had enabled
India to become the world’s top producer (ahead of China) and second largest
exporter (after the US) of the natural fibre.
●
But with the yield gains from Bt tapering
off and the regulatory regime not permitting new gene technologies, the country
has turned from a net exporter to an importer
of cotton.
7.
Other exports:
●
The drop has been even more for raw
cotton, guar-gum and oil meals.
●
Exports of the three in 2022-23 ($781.43
million, $617.14 million and $1.6 billion) were a pale shadow of their highs of
2011-12 ($4.33 billion for cotton) and 2012-13 ($3.92 billion for guar-gum and
$3.04 billion for oil meals).
Major
Import Products:
1.
Vegetable oil:
●
The most significant is vegetable oils,
whose imports have more than doubled in
value terms, from $9.67 billion to $20.84 billion between 2019-20 and
2022-23.
●
During November-March 2022-23, they have
grown further by 23.7% over the same period of the previous oil year.
●
Imports
meet roughly 60% of India’s vegetable oil requirements.
2.
Pulses:
●
India now almost has achieved ATMA NIRBHAR
in pulses with hardly 10% now in pulses, with the value of imports also coming
down from $4.24 billion (6.7mt) in 2016-17 to $1.94 billion (2.5mt) in 2022-23.
3.
Spices and others:
●
On the other hand, imports of spices, cashew and cotton – commodities where India has
traditionally been a net exporter – have shown a rising trend.
●
Spice imports going up are a reflection of
reduced price competitiveness (vis-à-vis Vietnam in pepper and Guatemala in
pepper), while an outcome of stagnant, if not falling, domestic production in
cotton.
Issues
in Agri-exports:
Agri-exports in the
current fiscal could face headwinds from two sources:
1.
International prices:
●
The latest FPI reading of 127.2 points for
April 2023 is down from the 159.7 points peak of March 2022 and the 2022-23
average of 139.5 points.
2.
Domestic prices:
●
The second source is domestic, more
specifically food inflation fears ahead of the 2024 national elections.
●
The government banned wheat exports last
May.
●
This was followed by a ban on broken rice
exports and the slapping of a 20% duty on all non-parboiled non-basmati
shipments in September.
●
Exports of sugar have also stopped since
this month’s start.
Initiatives
taken by India to boost agriculture export:
1.
Dedicated Agricultural Export Development Authority:
●
India encourages agricultural exports by
creating a dedicated body named the Agricultural and Processed Food Products
Export Development Authority (APEDA).
●
The government created APEDA under the APEDA Act 1985.
●
Under the Export Promotion Scheme of
APEDA, the government is providing assistance to the exporters of agricultural
products.
2.
New Agriculture Export Policy:
●
India has released its dedicated Agricultural Export Policy in 2018 to
boost Agriculture Exports and improve the livelihood of farmers.
3.
Double Exports:
●
To double agricultural exports from the
present $30 billion to $60 billion by
2022 and reach $100 billion in the next few years thereafter, with a stable
trade policy regime.
4.
Market Access:
●
To provide an institutional mechanism for
pursuing market access, tackling barriers and dealing with sanitary and
phytosanitary issues.
5.
Global Integration:
●
To strive to double India’s share in world
Agri-exports by integrating with the global value chain at the earliest.
6.
GI and Other Initiatives:
●
Several initiatives have also been taken
to promote products having registered Geographical Indications (GI) in India by
organising virtual Buyer Seller Meets
on agricultural and food products with the United Arab Emirates and on GI
products, including handicrafts with the USA.
7.
Transport and Marketing Assistance for Specified Agriculture Products:
●
The Government has also brought out a new
Central Sector Scheme, ‘Transport and Marketing Assistance for Specified
Agriculture Products’ - for providing assistance
for the international component of freight, to mitigate the freight
disadvantage for the export of agriculture products, and marketing of
agricultural products.
8.
Other initiatives:
●
The Government has several schemes to
promote exports, including exports of agricultural products, viz. Trade
Infrastructure for Export Scheme (TIES), Market Access Initiatives (MAI)
Scheme, Merchandise Exports from India Scheme (MEIS).
● The Government has allowed 100% FDI in the activities of agriculture through the automatic route.
Initiatives
to reduce agriculture import:
1.
Raising Minimum Support Price:
●
The raising of the minimum support price
of mustard from Rs 5,050 to Rs 5,450 per quintal for the 2022-23 crop season
will improve the mustard production thus mustard is the second largest oil seed
in production wise in India.
2.
GM mustard:
●
Government recently has granted clearance
(“environmental release”) for commercial cultivation of genetically modified
(GM) hybrid mustard.
●
Seed yields from the transgenic mustard
DMH-11, bred by Delhi University scientists, are claimed to be 25-30% more than
from currently-grown popular varieties.
3.
National mission for edible oil - oil palm:
●
India imports 60% of its total edible oil
consumption. Palm oil is the largest share in this import.
●
To reduce the Palm oil import, the
government in 2021 has introduced a new National Mission for Edible oil - Oil
palm scheme to increase the area of palm oil cultivation and productivity.