Rise in Export of Agricultural & Processed Food Products

Spotlight 21 (Aug) : DISCUSSION ON “RISE IN EXPORT OF AGRICULTURAL & PROCESSED FOOD PRODUCTS”.

https://www.youtube.com/watch?v=r_jJaLFPnxk

ECONOMY/ GOVERNANCE

• GS-3: Indian Economy
• GS-3: Food Processing

Rise in Export of Agricultural & Processed Food Products

• Despite Covid-19 restrictions, especially due to the second wave of pandemic witnessed during the first quarter of the current fiscal, India achieved a significant increase of 44.3 per cent in the export of agricultural and processed food products in the 2021-22 (April-June) in comparison to the corresponding period of 2020-21.
• According to WTO’s trade map, with the total Agri exports of USD 37 billion in the year 2019, India is ranked at 9th position in the world ranking.
• In terms of Indian Agri-exports, the country has registered an increase of 25.02 percent in terms of dollar and 29.43 percent in terms of rupees in the FY 2020-21 (April-March) in comparison to the same period in the previous year. However, it has been estimated that the country’s Agri-export will register a positive growth of about 15 percent in the current year (2021-22) as well.

Significance of the increase in export of agricultural and processed food products:

• India’s significant increase of 44.3 per cent in the export of agricultural and processed food products specially at a time when the exports in general are not well is not a small achievement.
• Among the factors that has given impetus to the rise in export includes:
  • The export of rice, which recorded a positive growth of 25.3 per cent, increased from $ 1914.5 million in April-June 2020 to $ 2398.5 million in April-June 2021. 
  • India reported a huge 415.5 per cent jump in the export of other cereals while the export of meat, dairy and poultry products witnessed an increase 111.5 per cent in the first three months of the current fiscal (2021-22). 

Outlook of agricultural export:

The outlook of agricultural export seems good due to the following reasons:

• There has been abundant rain along with poultry being free from disease in general.
• Also, earlier fear that some crackdown on meat industry or adverse impact on buffalo export In particular will happen is not there.
• Lastly the way government has managed to overcome strict Europe union norm for export of basmati rice is commendable
• The initiatives taken by Agricultural and Processed Food Products Export Development Authority (APEDA) under the Ministry of Commerce, has helped the country achieve this milestone at a time when the outbreak of pandemic was at its peak.

 As a result, India’s export along with will maintain its robust growth rate.

Challenges

• Farmers have reservations about the way market works.
• Farmer who grows rice are not necessarily the one exporting it and buffalo meat industry or poultry or dairy industry is unorganized so there is need to ensure greater coordination between agencies between the agencies that export and agencies that grow.
• Infrastructural support is another major challenge where government need to pay attention. 
• Lower yield of agricultural crops as compared to the world average. Also, the increase in landholdings leads to decrease in average farm size, which further intensifies the issue.
• Pro-consumer bias of government hurts agricultural exports. For example- putting export restrictions on imported food items prevents food inflation but also discourages the farmers.

How to improve market access?

• APEDA has to be the conduce creating seamless conductivity between producers and exporters
• The government should consider giving infrastructure status to agricultural value chains, such as warehousing, pack-houses, ripening chambers, and cold storage, etc. It would increase the credit flow in the sector.
• Creation of a Green channel clearance for perishable agro products in road, air, and freight cargo stations can reduce the regulatory delays.

Conclusion:

• India performance in global agriculture basket can be improved further if certain issued are properly resolved. Focussing on agriculture export can contribute significantly to doubling farmer income by 2022.

Can you answer this question now?

Critically analyse the export of agricultural and processed food products in India amidst covid 19 crisis.