UPSC Mains – Discuss the role of export duties as a policy tool in regulating essential commodities exports. Explore how India has transitioned from being an agricultural food importer to becoming a net food exporter to the world.

Introduction:

India has evolved into a net food grain exporter, evident from APEDA overseeing agricultural and processed food product exports totaling USD 24.8 billion in the fiscal year 2021-22. Export duties serve as a crucial policy tool employed by governments to regulate the export of essential commodities, aiming to ensure domestic food security and manage international trade dynamics.

Body:

Importance of Agricultural Export Promotion for India:

1. Economic Impact: Agricultural exports, contributing 10% to India’s GDP, witnessed a notable 17.34% growth in 2021, exceeding the previous record of $41.25 billion.
2. Financial Stability: Increased agricultural exports enhance the financial stability of farmers and agricultural businesses; for example, Indian mango farmers doubled their income through exports to the US and Europe.
3. Export Diversification: Growing agricultural exports reduce trade risks and bolster farmer incomes, as seen in the case of mango farmers in India.
4. Employment Generation: Agricultural exports create employment opportunities, particularly in rural areas with limited job prospects, according to the Federation of Indian Export Organizations.
5. Global Visibility: Successful agricultural exports enhance India’s global image, attracting international investment and promoting tourism.
6. Sustainability Promotion: Exporting organic and eco-friendly products fosters awareness of green living and encourages sustainable farming practices.
7. Technology Adoption: Export requirements drive the adoption of advanced technology and processes, enhancing efficiency.
8. Waste Reduction: Exporting perishable goods minimizes waste, promoting effective supply chain management and addressing post-harvest food waste issues, costing around 90,000 crore rupees, as per NITI Aayog.

Reasons Behind the Transformation from Agricultural Food Importer to Net Food Exporter:

1. Green Revolution: The adoption of high-yielding crop varieties, modern farming techniques, and increased use of fertilizers and irrigation during the Green Revolution significantly boosted agricultural productivity.
2. Improved Infrastructure: Investments in agricultural infrastructure, including irrigation systems and transportation networks, have streamlined production and distribution.
3. Government Policies: Policies such as minimum support prices (MSPs), subsidized fertilizers, and accessible credit facilities incentivized farmers to increase food grain production.
4. Technological Advancements: Advances in agricultural technology, including mechanization and precision farming, have enhanced productivity and reduced post-harvest losses.
5. Crop Diversification: Diversifying from traditional staples to high-value crops like fruits, vegetables, and spices has contributed to India’s agricultural export growth.
6. Entrepreneurship and Agribusiness: The emergence of agribusinesses and entrepreneurial endeavors has added value to Indian produce, promoting success in both domestic and international markets.
7. Globalization and Trade Liberalization: Active participation in the global economy, trade liberalization, and adherence to WTO norms have opened international markets for Indian agricultural products.

Challenges:

1. Infrastructure Limitations: Lack of adequate storage, transportation, and cold chain infrastructure can lead to poor-quality exports.
2. Non-tariff Barriers: Strict import laws and non-tariff obstacles in target countries can make Indian exports less competitive.
3. Quality Issues: Low product quality and failure to adhere to safety and quality rules can result in rejected exports.
4. Market Intelligence: Inadequate understanding of market demand and trends can lead to the production of mismatched products, reducing export potential.
5. Price Volatility: Fluctuations in commodity prices and currency exchange rates can impact the competitiveness of Indian exports.
6. Ineffective Supply Chain: Poor coordination between exporters, port authorities, and shipping firms can lead to delays and losses.
7. Limited Access to Export Credit: Lack of access to export credit and high interest rates can disadvantage Indian exporters.

Way Forward:

1. Sustainable Agriculture: Prioritize sustainable agricultural practices outlined in the National Mission for Sustainable Agriculture (NMSA) to ensure long-term productivity and environmental sustainability.
2. Climate Resilience: Invest in climate-resilient crop varieties to mitigate the impact of changing weather patterns.
3. Diversification: Diversify into high-value crops, organic farming, and niche products to increase export opportunities and farmers’ income.
4. Market Access: Continue efforts to expand global market access for agricultural products, including participation in international trade agreements.
5. Digital Agriculture: Adopt digital technologies for precision farming, crop monitoring, and supply chain management to enhance efficiency and reduce wastage.
6. Food Processing: Strengthen the food processing industry to add value to agricultural products and decrease post-harvest losses.
7. Research and Development: Invest in agricultural research and development for new technologies, crop varieties, and farming practices that boost productivity and resilience.\

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