Article:
India’s agriculture sector has seen significant growth in the past couple of years. This growth is expected to reach new heights in the financial year ending March 31, 2023. However, the increase in imports could offset this growth, reducing the overall farm trade surplus. Let’s dive into the specifics of India’s agri-statistics, focusing on key contributors like rice and sugar, and examine related initiatives as well.
Exploring the Agri-Statistics
From April to December 2022, India saw a 7.9% increase in farm exports, valued at USD 39 billion. This is higher than the USD 36.2 billion reported for the same period in the previous year. However, this growth has paralleled an increase in imports, which rose by 15.4% to USD 27.8 billion during the same timeframe.
Rice and sugar have played significant roles in driving India’s agri-export growth. In 2021-22, India exported a record 21.21 million tonnes of rice, worth USD 9.66 billion. Of this amount, non-basmati rice accounted for 17.26 million tonnes and basmati rice for 3.95 million tonnes. Sugar exports also increased, hitting an all-time high value of USD 4.60 billion in 2021-22, up from USD 2.79 billion in the previous fiscal year.
An Overview of Import Increases
India’s total edible oil imports escalated from 13.13 million tonnes in 2020-21 to 14.03 million tonnes in the 2021-22 oil year. Cotton, too, saw a dramatic shift, with India changing its status from a net exporter to a net importer. During April-December 2022, cotton exports dropped to USD 512.04 million, while imports rocketed to USD 1.32 billion.
Key Initiatives and Policies
Several initiatives have been undertaken to encourage agricultural growth. These include the Agri Export Policy, Trade Infrastructure for Export Scheme, Agricultural and Processed Food Products Export Development Authority, and the Market Access Initiative.
International Commodity Prices and India’s Farm Performance
The UN Food and Agriculture Organization’s (FAO) Food Price Index offers useful indicators. In 2012-13 and 2013-14, when the index was at approximately 120 points, India’s agri-exports stood at USD 42-43 billion. These exports fell to USD 33-34 billion when the index dropped to 90-95 points in 2015-16 and 2016-17. It’s worth noting that the FAO index reached 159.7 points in March 2022 but has been decreasing since.
A Proactive Approach and the Path Forward
Concerns are now growing around the surging rate of imports rather than the slowdown of exports. Policymakers may need to shift their focus from being pro-consumer (restricting exports) to pro-producer (providing tariff protection against uncontrolled imports). The impacts of not allowing new genetic modification (GM) technologies after the first-generation Bt cotton are evident and affecting exports. A proactive approach is required in edible oils as well, where the Supreme Court currently contemplates planting GM hybrid mustard.
Insights from UPSC Civil Services Examination Previous Year Questions
Looking at past UPSC questions provides valuable insights into trends. For instance, Q1 from the 2019 examination highlighted that India has been the world’s leading rice exporter since the early 2010s, primarily because of lifting the ban on non-basmati rice exports in 2011. Question 2 in 2018 pointed out that the quantity of imported edible oils exceeded domestic production for five consecutive years. However, please note that the government does impose customs duty on all imported edible oils.
