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Draft Agriculture Policy criticises export curbs, stresses on transparent supply chain

A draft "Agriculture Export Policy" prepared by the Union Commerce Ministry has criticized the practice of imposing curbs on export of agricultural produce to tame domestic inflation.

twitter-logo Joe C Mathew   New Delhi     Last Updated: January 31, 2019  | 19:18 IST
Draft Agriculture Policy criticises export curbs, stresses on transparent supply chain

A draft "Agriculture Export Policy" prepared by the Union Commerce Ministry has criticized the practice of imposing curbs on export of agricultural produce to tame domestic inflation.

The draft policy, in public domain for stakeholder comments, says that India's domestic policies, largely aimed at food security and price stabilization, are also perceived as impeding trade, innovation and perversely food security itself. "Lack of consistent policies in the areas of farm production, support prices and R&D to inland transportation, exit point infrastructure and export restrictions have the potential to result in uncertainty among the stakeholders and loss of opportunity", it notes.

The policy aims at providing an 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, even though the primary agricultural product or non-organic agricultural product is brought under some kind of export restrictions. It highlights the need to identify the commodities that are essential for food security and keeps all other agricultural products out of all kinds of export restrictions.

State governments' tasks 

It wants all DGFT field offices, Export Promotion Councils, Commodity Boards and Industry Associations to act as advocacy forum for reform by all the states. The policy also wants the 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. 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 says.

The Commerce Ministry also wanted the states to adopt the model Contract Farming Act announced by the Agriculture Ministry.

"It is a comprehensive act, which provides for enforcement of contracts and dispute settlement mechanism without approaching the judicial system. The diffidence with regard to land reforms by the state governments can be largely offset by adopting the model contract farming act, which provides a possibility of an extended farming area cultivating a certain agricultural product with an assured return as agreed before," the policy draft said.

Private Investments

The government expects contract farming to bring in large scale private investments in agriculture, thus leading to large scale mechanization and thus produce surplus volumes of standardized, exportable quality of agricultural products.

Logistics is another area where the policy gives lot of attention. "It is often pointed out that expenses towards logistics handling is about 14 to 15 per cent of the cost of exports. Benchmarked against 8 to 9 per cent in some of the developed economies, the savings on account of improved logistics can make Indian agricultural exports significantly competitive in the global market place. It will be the endeavour of Agri Export Policy to compile the logistic bottlenecks, confronting different products and work with the newly created Logistic Division in the Department of Commerce and work with different Line Ministries, State Governments for addressing the issues".

Value Addition

The policy aims to push for a "whole of government approach" to address issues of R&D for improved varieties, value addition and packaging, establishment of a good standards regimen, a holistic response to SPS and TBT barriers faced by Indian products and identification of winning sectors and strategies for augmenting exports in those sectors.

Focus on clusters, promotion of value added exports, marketing and branding of organic products, are also important elements of the draft "Agriculture Export Policy".

The last date of accepting stakeholder suggestions on the draft policy is 5th April, 2018.

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