Agriculture Export Policy Strategic Recommendations

Agriculture Export Policy Strategic Recommendations

Policy Measures

Discussions across the region with public and private stakeholders
Certain structural changes needed to boost agricultural exports have been highlighted by the agricultural value chain. These include both general and commodity-specific actions that can be taken urgently and at little or no financial cost. The subsequent gains, though, are ample.

 Stable Trade Policy Regime

Given the domestic price and volatility of production of certain agricultural commodities, there has been a tendency to use trade policy as an instrument to achieve short-term inflation mitigation objectives. Such, such, Product and sector-specific measures are often circumstantial, such as the ad hoc ban or the imposition of a minimum export price (MEP) for onion and non-Basmatian rice exports. This disrupts export supply chains and impacts the image of India as a reliable one. Suppliers that influence the realisation of prices for Indian products. The country is seen as a source of high-quality agricultural products and changes in the export regime can have long-term repercussions due to domestic price fluctuations and religious and cultural beliefs.

These measures require continuous fine tuning and keep the market anxious, often resulting in price shocks. While these decisions may serve the immediate purpose of maintaining domestic price stability, they eventually distort India 's image as a long-term and reliable supplier in international trade. A stable and predictable policy with limited state interference must be framed in order to send a positive signal to the international market. It is necessary to refrain from distinguishing products intended for export from products intended for domestic consumption. One way to do this is to decide that only in the most rare circumstances would export restrictions / bans be resorted to. This alone will give the farmer some trust in planning for the overseas market. Policy measures should ensure that farmers react with confidence to market signals and redirect resources to products that will earn higher returns.

The Agri Export Policy thus aims at:

1. Ensuring that processed agricultural products and all types of organic products are not subject to any kind of export restriction (i.e. minimum export price, export duty, export ban, export quota, export capping, export permit, etc.) even if some kind of export restriction applies to the primary agricultural product or non-organic agricultural product.
2. Identification, in consultation with the relevant stakeholders and ministries, of a few commodities which are essential for food security. Any export restriction on such identified commodities in an extreme price situation will be based on a high-level committee decision. Any kind of export prohibitions and restrictions on the above-identified commodities would also be accepted in a manner compatible with the WTO.
3. Liberalized imports for value adding and re-exporting of agricultural products.

Reforms in APMC Act and streamlining of mandi fee

Acts across states have not been able to achieve the welfare of farmers envisaged in these Acts through Produce Marketing Committees (APMC). A classic case in point is some APMC market yards or mandis that have bred inefficiency and cartelization. Farmers have been forced to sell their produce in official market yards for decades, which may or may not offer the highest remunerative prices. The APMC monopoly prevents private players from setting up markets and from investing in infrastructure for the market.

The market fee, the arthiya commission and other fees left outside the tax on goods and services (Goods and Services Tax, GST) remain under the control of the state (and local authorities). Different States continue to charge various mandi procurement fees (Basmati rice-Punjab 4%, Haryana 4%, Delhi-1%; Pulses-Maharashtra 1%, UP 2.5%; Soya de-oiled cake)-- 0.85% for Maharashtra, 2.2% for Madhya Pradesh).