India should focus on diversifying and expanding its agriculture export basket so that higher-value products can be shipped out instead of primary products, says Parashram Pati, Director, Agricultural and Processed Food Products Export Development Authority (APEDA), and senior advisor, Agriculture, Maharashtra Institution for Transformation.
The high-value shipments should include perishables, processed food and organic produce, he told businessline in an interview in response to a question on the problems Indian agricultural exports are facing. “Agri exporters of fresh and processed food confront difficulties and non-tariff measures imposed by other countries. Some of these include restrictive export policies,” he said.
Offer incentives
Time has come to offer incentives to the export of high-value agri-produce such as fruits and vegetables, spices, tea, coffee and cotton to make agri exports sustainable, Patil said. Encouraging co-operatives for promoting agricultural exports will be a strategic move, he said.
Indian exporters should also look at new products and markets. For instance, products such as fresh fruits, buffalo meat, processed vegetables, processed fish, processed spices, and alcoholic beverages can be considered while exploring new export destinations in Asia and the Middle East, he said.
Other factors affecting exports are low investment in agriculture research and development ( 0.5 per cent of GDP), not maintaining consistent quality and not measuring to international standards for agricultural exports, he said.
Inadequate storage infrastructure, transportation and processing lead to post-harvest losses, thus reducing the competitiveness, price and quality competitiveness of Indian agricultural exports, Patil said, adding that the mandatory pre-shipment examination by the Export Inspection Agency is lengthy and costly.
Nurture food processors
Calling for precaution in exports of some products, he said compulsory Spice Board certification is needed even in the ready-to-eat products that contain spices in small quantities, while strategic planning of exports is required by the State governments.
Patil said the lack of predictable and consistent agricultural policies is discouraging investments by the private sector. On the other hand, prohibition of the import of meat and dairy-based products by developed countries, withdrawal of the Generalised System of Preference (GSP) by the US for import of processed food from India, export shipments to the US requiring an additional health certificate, absence of equivalency agreement with developed countries for organic produce are other dampeners.
The Centre should formulate policies that nurture food processing companies, lower the cost of production and meet global food quality standards apart from creating a supportive environment to promote export of processed food.
Developed countries have fixed higher standards for import of food items and reputed Indian brands should be encouraged to export processed foods as they can comply with the standard of Codex. They should also focus on cost competitiveness, quality standards and technology.
Impact on agri-commodities
“India has competitive advantages in various agricultural commodities that can be converted into processed foods. A specific long-term strategy is needed with the diversification of agricultural production and agricultural exports,” the APEDA director said.
Agriculture exports declined by 8.8 per cent to $43.7 billion during the April-February period of 2023-24 fiscal due to the Red Sea crisis, the Ukraine war and domestic curbs on commodities such as rice, wheat, sugar and onion, Patil said. “The decline in agricultural exports always had a negative impact on agri-commodities in the domestic market… This calls for diversification of agricultural exports,” he said.
Referring to the India Meteorological Department forecast of above-normal rainfall during the monsoon this year, he said it is welcome news for the farm sector and the economy.
Advance planning
“More and better-distributed rainfall this year is likely to result in higher sowing, higher production, productivity and profitability for the agriculture sector. Hopefully, the production of cereals, paddy, horticulture crops and spices will be good. Sufficient production will help us to supply agricultural goods in the international market consistently,” the APEDA official said.
He called for advance planning for exports in case of excess production to stabilise prices and benefit consumers and producers.
Stressing that value-addition in agriculture is required to increase the profitability and income of the farmers, he said processed food has a longer shelf-life and improves bargaining power while addressing surplus production of any produce.
The Centre should develop a high-value-added processing ecosystem to minimise minimum support price (MSP) challenges faced by farmers. Farmer Producer Organisations (FPOs) have to become a part of the export value chain and they can play a very important role in adopting good agricultural practices in remote areas to control quality.
Major concern
“Agri exports require quality and quantity agri on a large scale. This can be addressed only by contract farming or through FPOs. Some initiatives such as the Indo-German Cooperation on Agriculture Market Development Project (a joint initiative of India and Germany) in Uttar Pradesh, Odisha, and Rajasthan have been taken to make FPOs exporters,” he said.
Agri logistics is one of the major concerns affecting export competitiveness, he said, adding that upgraded and integrated ports, airports, roads, and rail networks, streamlined operations with automated tracking and digital documentation and enhanced refrigerated storage and transport for perishable goods were the key.
Currently, Maharashtra is well equipped with agri-logistics infrastructure, while Gujarat, Karnataka and Andhra Pradesh also have good infrastructure.
Farmers should invest in post-harvest Infrastructure and develop storage facilities, packaging and transportation to maintain product quality during transit. They should take part in international trade fairs, exports and trade missions to network with potential buyers and understand market demands, said the APEDA official.
India requires vision and suitable strategies with implementable actions for agricultural exports. “The growth in agri exports will have a direct impact on farmers margin and rural sustainable economic development,” Patil said.