Re-Examine Agri-Export Basket

Agri-exports at new heights:

• Agri-exports touched $41.8 billion in FY 2020-21, registering a growth of 18% over the previous year.
• However, even these exports fall much short of the target of $60 billion that the Narendra Modi government set out to achieve by 2022.

Issues of sustainability in agri-exports of India:

• Water guzzling:
  • Amongst the various agri-commodity exports, rice ranks first with 17.7 million tonnes valued at $8.8 billion, roughly 21% of the total value of agri-exports.
  • Rice and sugar are well-known water guzzlers – 1kg of sugar has a virtual water intake of about 2,000 litres.
  • In 2020-21, India exported 7.5 million tonnes of sugar, implying that at least 15 billion cubic metres of water were exported through sugar.
  • India is a water-stressed country with per capita water availability of 1,544 cubic metres in 2011, down from 5,178 cubic metres in 1951.
• Provisions of heavy subsidies:
  • They are heavily subsidised through cheap/free power for irrigation as well as fertilisers, especially urea - power and fertiliser subsidies account for about 15 % of its value in states like Punjab and Haryana.
  • Sugar-exporting countries like Australia, Brazil and Thailand have registered a case against India at the WTO.
• Greenhouse Gas Emissions (GHGs): Rice cultivation contributes to more than 18 % of the GHG emission generated from agriculture.
• Declined exports in broader terms: Agri-exports have remained lower than the level reached in FY2013-14 ($43.3 billion)
  • It has slid to 13.5% by FY2020-21, indicating India is becoming less globally competitive in exports and more protectionist in imports, presumably in the name of Atmanirbhar Bharat.
• Price distortions: Non- basmati exports are actually sourced not only below- MSP but also below the average domestic mandi prices prevailing in the country.
  • One possibility is that a substantial part of supplies through the PDS and the PM Garib Kalyan Yojana are leaking out and swelling rice exports.

Way forward:

• Adopt water-efficient farming practices:
  • Farming practices such as alternate wetting drying (AWD), direct-seeded rice (DSR) and micro-irrigation will have to be taken up on a war footing.
  • Farmers may be incentivised and rewarded to save water, switch from paddy and sugar to other less water guzzler crops, and reduce the carbon footprint.
  • It is high time to introduce direct cash transfers in PDS for rice.
  • Diversification of agricultural systems to save up on costs of burgeoning buffer stocks and diverting those savings towards research and development.
• Better logistics and infrastructure: An export-led strategy also needs to minimise logistics costs by investing in better infrastructure and logistics.