Why in the news? 

India’s agricultural exports have declined in the fiscal year ended March 31, 2024, on the back of shipment curbs on a host of commodities, from cereals and sugar to onions.

The Need for a New Export-Import Policy for Agriculture:

• Decline in Agricultural Exports: India’s agricultural exports fell by 8.2% in the fiscal year ended March 31, 2024, due to shipment curbs on various commodities, including cereals, sugar, and onions. This decline highlights the volatility and vulnerability of agricultural trade.
• Impact on Export Restrictions: Export restrictions imposed by the government, such as bans on sugar and non-basmati rice exports, have led to a significant decrease in export values.
• Market Stability: Farmers and agri-traders require policy stability and predictability to make informed decisions. Abrupt changes in export-import policies, such as sudden bans or restrictions, can disrupt trade and adversely affect agricultural businesses.
• Need for comprehensive framework: Export-import policies should strike a balance between the interests of producers and consumers. While export restrictions may benefit consumers by stabilizing prices, they can result in revenue losses for producers. A more predictable and rules-based policy framework is needed to ensure fairness and transparency.
• Low tariffs on certain commodities: The current import policy, characterized by low on certain commodities like pulses and edible oils, contradicts the government’s objective of promoting crop diversification.

Measures that needs to be taken in the present scenario:

• Long-Term Goals for the Farm Sector: A new export-import policy should align with the long-term goals of the agricultural sector, including sustainable production practices, crop diversification, and increasing farmer incomes.
  • Balancing short-term consumer needs with long-term agricultural sustainability is essential for the sector’s growth and resilience.
• Rationalizing Export-Import Policy: The government post-election may need to rationalize the export-import policy by introducing measures such as temporary tariffs instead of outright bans or quantitative restrictions.
  • A rational and coherent policy framework will support the growth and competitiveness of India’s agricultural sector in the global market.
• Higher Import tariffs: It could incentivize domestic production of pulses and oilseeds, reducing dependence on imports and supporting farmers.

Conclusion: Export-import policies should strike a balance between the interests of producers and consumers. While export restrictions may benefit consumers by stabilizing prices, they can result in revenue losses for producers. A more predictable and rules-based policy framework is needed to ensure fairness and transparency.

Mains PYQ: 

Q In the view of the declining average size of land holdings in India which has made agriculture non – viable for a majority of farmers should contract farming and land leasing be promoted in agriculture? critically evaluate the pros and cons.(UPSC IAS/2015)

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