Agricultural exports are influenced by a range of supply-side factors, including food security, processing facilities, infrastructure bottlenecks, and various regulations, it said.
However, given the volatility in domestic prices and production of certain commodities, trade policy has often been employed to achieve short-term domestic objectives, such as managing inflation through product-specific interventions, including ad hoc export bans or the imposition of minimum export prices, it noted.
Frequent policy changes can significantly disrupt export supply chains, create market uncertainty and cause foreign buyers to switch to other sources. Export markets once lost are not easily recovered, it said.
Although these measures may temporarily stabilise domestic prices, they risk longer-term reputational costs, particularly as India is widely regarded as a source of high-quality agricultural products, the survey said.
“Therefore, measures such as subsidised distribution of essential food items via the public distribution system, managing buffer stocks and intervening in the market via an open market sale scheme, using the Essential Commodities Act, 1955 to prevent hoarding and speculation, and deploying the price stabilisation fund to convert buffer stock for retail sale are the policy options available to ensure availability of agricultural products at fair prices for the domestic market,” it said.
It is possible to stabilise domestic availability and prices while enabling farmers to tap global markets for better incomes, the survey said.
By maintaining a delicate balance between fulfilling domestic demand and harnessing its export potential, India’s remarkable achievements in agricultural production can translate into export-led growth, enabling the country to achieve its goal of USD 100 billion in agricultural exports, it said.
Exports also make farmers more productive and competitive by fostering knowledge accumulation and market feedback, the survey said.
As an aspirational economy, India will see its imports rise steadily. That is the global experience over centuries. India must explore all opportunities to increase its export earnings to pay for the import needs of a growing economy, it said.
“Agricultural exports are a low-hanging fruit with immense export potential. Importantly, they carry international leverage for India. Policies, therefore, must be aligned with this imperative,” the survey suggested.
