Syllabus: GS/ Economy, Agriculture
Context
- Despite India’s active negotiations of Free Trade Agreements with global partners, the agriculture sector, vital to its economy and employment, remains largely excluded.
Why Agriculture is Missing from India’s FTAs?
- Fear of Import Surge: Entry into FTAs like RCEP was abandoned over concerns that cheap agri imports, especially dairy from New Zealand and Australia, would hurt Indian farmers.
- Agriculture is a State subject, whereas trade is in the Union list. This leads to inconsistent policies — bans, export quotas, or quarantine rules — harming exporter confidence.
- Infrastructural Deficiencies: Absence of cold chains, agro-processing hubs, and efficient port logistics, especially in landlocked states limits agricultural trade potential.
- Indian agricultural exports suffer from quality issues like pesticide residues, aflatoxins, and weak compliance with global SPS (Sanitary and Phytosanitary) norms.
Efforts taken by other countries
- Thailand: Thailand’s agri-export success is driven by its focus on industrial crops like rubber, strong agro-processing linkages, and over 18 FTAs that enhance market access and boost value-added exports.
- Brazil: It leveraged mechanised farming, logistics corridors, and value addition in soy, coffee, and meat to reach $166 bn agri exports.
India’s Existing Strengths
- Basmati Rice: India’s agricultural strength lies in its globally recognized products such as Basmati rice, which alone contributes to around 21% of the country’s agricultural exports.
- GI-Tagged Products: Gaining visibility under schemes like One District One Product (ODOP).
- Agricultural and Processed Food Products Export Development Authority (APEDA) works towards quality promotion and certification, though more integration with smallholder farmers is needed.
How to make Indian Agriculture FTA-Ready?
- Shift from Commodities to Branding & Value Addition and develop agro-processing clusters near APMCs.
- Promote branded products and niche categories like organic, GI-tagged, or processed food.
- Institutional Reforms: Create a National Agricultural Trade Council with Centre-State-industry coordination.
- Ensure single-window clearances and digital export compliance.
- Infrastructure and Logistics: Invest in inland container depots, cold storage, and rural logistics in landlocked states.
- Agri-Investment Strategy: Move from input subsidies to Direct Benefit Transfers (DBT) to incentivise diversification and innovation.
Efforts taken by India
- The Agri Export Policy of 2018 is a comprehensive initiative by the Indian government to boost agricultural exports and integrate Indian farmers into global value chains.
- The Agricultural and Processed Food Products Export Development Authority facilitates certification, market intelligence, export promotion, and capacity-building programs for stakeholders.
- Initiatives like the Paramparagat Krishi Vikas Yojana (PKVY) and National Programme for Organic Production (NPOP) aim to tap into growing global demand for chemical-free, sustainable produce.
- Negotiation of Market Access: India continues to engage in bilateral and multilateral negotiations to reduce tariff and non-tariff barriers for its agricultural goods and secure preferential market access.
Concluding remarks
- India’s cautious approach to agriculture in FTAs safeguards farmer interests but also restricts the sector’s export potential.
- Moving forward, a balanced strategy with targeted reforms can help integrate Indian agriculture into global markets more effectively.
Source: DH