Govt to focus on value-added products, new markets to improve agricultural exports

Himanshu Vatsa | The Dollar Business

The government is working on a strategy to improve India’s agricultural exports which have seen sharp fall in the past one year. Agricultural exports contribute more than 10% of the country’s total export. But the government data says that the annual exports of six key agricultural items saw negative growth during the last financial year. Among the six major items, the export of oil meals reduced to $1.32 billion, more than 52% lower than that of previous year. The annual export value of cereals fell by 27% while the shipment of tea, fruits and vegetables declined by around 16% and 9% respectively. Besides, export of tobacco and spices also decreased last year. Now, the government has decided to focus on exporting value-added agricultural products, branding, packaging and exporting them to new markets, a report said citing Ministry of Commerce officials. Falling commodity prices in the international market is cited as a major reason for declining Indian exports. However, experts believe that Indian agricultural products do not meet the global standard of quality and price. “There should be some mechanism to control price fluctuation. Indian products are mostly rejected due to the presence of pesticides. On the other hand, Chinese agro-products are in great demand. Chinese suppliers also offer lower rates,” said Kalpesh Mordiya, owner of Nilkanth Exports. Exporters also complain about the lack of facilities for storage and processing of foods in the country. “If anyone wants to apply for setting up a storage plant or a processing unit, the procedure is very complicated and lengthy. Even getting a loan from bank is not easy. The system is not organised. There is no check on the use of pesticides. Products without pesticides are hardly available and that’s why our products fail in the global market. The government should provide adequate subsidy to make us competitive in the market,” Mordiya told The Dollar Business. In May this year, the export of cereals reduced to $37.75 million, 77.71% down from $169.35 million during the same month last year. Also, the export of rice and oil seeds recorded a fall of more than 14% and 18% respectively compared to the figure of the same period a year ago. Falling agro exports is one of the main reasons for the decline in country’s annual overseas shipment. India’s overall merchandise export during March and April this year was worth $44.4 billion, down 17.21% from US$ 53.6 billion recorded during the first two months of the last fiscal.  

June 22, 2015 | 05:02 pm IST.