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India's agriculture export zones need a boost: Assocham study on markets
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Wednesday, 03 August, 2011, 08 : 00 AM [IST]
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Our Bureau, New Delhi
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A study undertaken by ASSOCHAM (The Associated Chambers of Commerce and Industry of India) has revealed that agriculture export zones (AEZs) deserve a boost by policy-makers and the private sector as India ranks dismally low in global trade despite being a major producer of agriculture products.
With food and agriculture exports totalling $15.6 billion, India's share is a meagre 1.6 per cent of the total global trade. The trade index by Food and Agriculture Organisation (FAO) of the United Nations positions India's exports in quantity terms at 222nd place and in value terms at 237th place.
Agriculture and related activities account for employment to 55 per cent of the population in the country, 14.6 per cent of the GDP and 10.2 per cent of total exports, said Assocham in its study titled Agri Export Zones - Towards Newer Market.
The study was released on Tuesday by C R Biswal, principal secretary (food processing), department of industries and commerce, Government of Andhra Pradesh; Ravindra Sanna Reddy, chairman of southern regional council, ASSOCHAM; and D S Rawat, secretary-general.
It is critical to have consistency in export promotion policies, said Rawat. The focus should be on commodities where India has marketable surplus and competitive strength in global markets.
India has become the world's largest producer across a range of commodities due to favourable agro-climatic conditions and rich natural resource base. The total geographical area of India is 329 million hectares of which 141 million hectares is net sown areas while 196 million hectares is the gross cropped area.
The country has a variety of crops grown in irrigated and rained areas. Rice, wheat, jowar, maize and bajra are the major food grains. Oilseeds, sugarcane, cotton and jute are important cash crops. Likewise, tea and coffee are important plantation crops. The agricultural production systems also include a wide range of horticulture crops.
India produced 90 million tonnes of rice last year, over 80 million tonnes of wheat, 34 million tonnes of coarse cereals, 15 million tonnes of pulses, 25 million tonnes of oilseeds and 278 million tonnes of sugarcane.
India is the largest producer of fresh fruits and vegetables, and ranks as the second in production of cashew, cabbage, cotton seed, garlic, cardamom, onions, sugarcane, tomatoes, coconut, groundnut, tea, green peas, cauliflower, potatoes and inland fish.
Total investments in AEZs across 20 states so far have been worth Rs 1,098 crore with exports valued at Rs 10,690 crore.
"Indian exporters have not succeeded in establishing direct linkages with consumers in importing countries," said Rawat. "A large proportion of exports are being further processed and re-exported by other countries."
He said that the agriculture sector had vast opportunity for employment generation and trade. There was need to have a long-term sustainable policy which attracted more investments and increase private sector's participation in remote rural areas, said Rawat.
"The government should introduce fresh initiatives to boost post-harvest and processing technologies so that farmers can get good returns."
The AEZ concept has the potential to improve agriculture output and quality besides reducing post-harvest losses and upgradation of technology, farmers' skills and income.
"It can result in development of internationally competitive production base and increased private investments, leading to increased employment and overall economic development," he said.
About 40 per cent of agriculture produce is lost due to inadequate infrastructure. The AEZ development authority should ensure availability of necessary infrastructure at affordable rates. The study said the zones must be well-connected by appropriate and feasible mode of transport.
ASSOCHAM also called for tax breaks for research and development in the sector besides food processing industries. The government should allow free movement of products across state borders to encourage food processing varieties.
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