DNA Jaipur 10th Anniversary: Farming policies, reaping benefits

Our prime minister, Narendra Modi, has resolved to double farmers’ income by 2022-23. This is central to promote farmers’ welfare, reduce agrarian distress and bring parity between income of farmers and those working in non-agricultural professions. Farmer distress has become a major issue in the country’s politics, especially when faced with adverse election outcomes. Anything and everything connected with agriculture is being visited and revisited by our policy makers. But there are no easy solutions. For the first time, an agriculture export policy is being discussed.

The government of India’s department of commerce has recently circulated a draft ‘Agri Export Policy’ which provides a broad policy framework to promote agriculture exports and integrate Indian farmers with global markets. The policy aims to double farmers’ income and increase the share of agricultural exports from present US$30bn to US$60bn by 2022. In the spirit of cooperative federalism, and in order to make this policy much more pragmatic and action-oriented, the Department of Commerce has asked state governments to provide their comments and feedback on it.

Where does Rajasthan stand in this game? It occupies an important place in agriculture sector and significant portion of its economy is agrarian. The agricultural sector of the state constitutes 22.5 per cent of the State Domestic Product. Rajasthan is a leading producer of coriander, cumin, guar gum, chick pea, soybean, mustard, cotton and animal products including milk and meat.

Trade Policy and not Export Policy

Instead of calling it an Agriculture Export Policy, it should be called Agriculture Trade Policy, having equal emphasis on export as well as import aspects of trade. Other than the fact that we could import agriculture goods and add value to export the same. Furthermore, we also have to keep consumers’ interests in mind. For e.g. we are importing many farm goods such as fruits to cater to consumer’s demands and in time of shortages we also import cereals etc.

In order to formulate a stable trade policy regime, it is important to collect detailed information on production and consumption of all agriculture and allied products. This would help assessing the demand and consumption patterns in the country on a regular basis.

Furthermore, there is the need to segregate agriculture products into two groups: a) essential products and b) non-essential products. For essential products, export restrictions can be placed but they need to be reviewed on a quarterly basis. For non-essential items, an open trade policy regime should be formulated and followed.

Cluster approach would succeed

The draft policy speaks about clusters: Agri Economic Zones (AEZ) and Special Economic Zones (SEZ)—but doesn’t mention Mega Food Parks which is also based on cluster approach. The state government is contemplating to set up clusters for spices such as cumin, coriander to improve exports of these products. A similar approach can be taken for milk and milk products, and meat and meat products. Rajasthan has been an exporter of freshwater fish for many years, which can be scaled up. Therefore, this policy should have emphasis on Rajasthan-specific product clusters for exports and their linkages with similar clusters in other states should be explored.

It should encourage states to include agriculture and allied products in their state-specific trade strategy. Gujarat, Punjab, Himachal Pradesh, Maharashtra have formulated their export strategy in line with the National Foreign Trade Policy of India. Therefore, it is important for states to align their agriculture trade policy with that of India. This will help states to enhance farmer’s income and reduce farm distress.

Dealing with non-tariff barriers

India’s exports of agriculture and allied products face SPS (Sanitary and Phyto-Sanitary measures) and TBT (Technical Barriers to Trade) related issues/barriers in international markets. This is mostly happening due to lack of information among our producers and exporters about ever-evolving regulatory standards which are applied on specific products. Such issues are directly associated with the production of agriculture products and needs to be tackled at their source.

This dynamic underlines the importance of creating information-sharing mechanism between states and the Union on SPS and TBT issues faced by specific products. This will help states to take proactive measures to address challenges emerging from an ever-evolving regulatory environment in specific export markets. For this purpose, the Union government should provide necessary technical and capacity building assistance to state governments.

The policy must envisage product-specific trading manual, detailing, among other things, standards, processes for exports and imports, market information, types of licenses, etc. in a step-by-step mode (hand-holding approach). There is also the need to develop the capacity of such traders in two-tier and three-tier cities as they have very limited understanding of complex issues on international trade in agriculture and allied products.

There is the need to develop more food testing laboratories in Rajasthan. Currently, there are only five NABL (National Accreditation Board for Testing and Calibration Laboratories) accredited laboratories in Rajasthan, which are primarily used for testing of domestic food products.

There is the need to develop product-specific testing infrastructure and for this purpose a cluster approach will be most suited. This policy should include a plan of action on generating awareness by state governments among the farmers including dairy farmers and the institutional framework through which this can be achieved.

The author is Secretary General, CUTS International