Problems of agriculture export and import in india
Answers
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There is a rise of 30% in value of imports of three essential agro items, namely wheat, pulses, vegetable/edible oils—indicative of substantive demand pull in the country (see accompanying graph). Data analysis of India’s seven select but vital agro-related items of exports reveals that there is a sharp slump—40% in their overall value—during last four years. Commodities are wheat, rice, sugar, cotton, soy meal, guar gum and beef+fish.
Exports falter when goods are not competitive or if there is a lack of local production and/or poor demand overseas. Edible items are of daily use. Thus, with rising population, the probability of lower demand abroad is not logical. Two successive draughts in 2014-15 and 2015-16 may justify the drop in production, but the lack of adoption of new technologies and efficient farm practices is the root cause.
Imports
Import of pulses jumped from $2.3 billion in 2013-14 to $4 billion—an increase of 74%. Out of 5.4 million tonnes (mt) of pulses shipped to India, 50% or about 2.7 mt are peas/yellow peas from Canada/USA. Kharif acreage of pulses is down by 33% which points to lower output, compelling higher imports of Tur, Urad Moong. News of possible decline in production will make imports costlier.
The government has been fronting state agencies for import through bulk tendering. PSUs tenders escalate world prices, thereby pushing up values for private import as well. When state agencies dispose pulses in the domestic market at subsidised prices—that is at a loss—it disturbs the parity of private imports because they cannot discount their costs. This may discourage import, thereby creating more scarcity in the country.
Exports
In 2014-15, basmati/ non-basmati rice exports were $7.8 billion, this has slipped to $5.8 billion in 2016-17, but still, India remains world’s largest exporter of rice at 10 mt. Poor demand in Africa, especially in Nigeria, of non-basmati rice, and slow down of basmati shipments to Iran and Saudi Arabia could be possible reasons. Iran shipments declined over 50% from 1.44 million tonnes in 2013-14 to 0.7 million tonnes in 2016-17.
The outlook for non-basmati rice for 2017-18 appears positive as strong demand from Nigeria via neighbouring Benin is supportive; Bangladesh requires more than one million tonnes of rice desperately and trade is focused on this demand. Indian non-Basmati rice prices are lower than the competition from Thailand, Vietnam, Pakistan.
The success of rice export business is attributed to minimal interference by the government, diversity of paddy varieties, superior capability for par-boiled rice, logistical advantages for Africa, botched-up past policies of the Thai government in paddy pricing and poor performance of Pakistan. Indian rice export is negligible to South-east Asia and China.
We are becoming a high-cost economy in agro-related items. If we continue to dither in our export earnings by the lack of quality/procedures/poor yields/price parities, resultant suffering will be transmitted via trade to the farmers and another undesirable cycle of joblessness and loan waivers will commence.
Hope this helped you.