Major Problems of Agricultural Export in India

Topics: International trade, Infrastructure, Export Pages: 5 (1531 words) Published: March 25, 2011
Major Problems of Agricultural Export in India
India is one of the leading producers of certain agricultural commodities. For instance, India is the largest producer of milk, cashew nuts, coconuts, tea, the second largest producer of wheat, vegetables, sugar and fish and the third largest producer of tobacco and rice. It is understood that the developed countries which are interested in protecting their agriculture with various subsidies and trade barriers and they are anxious to push their farm exports. The developed countries provide more than $300 billion of subsidies every year to their agriculture. Under existing of WTO rules the maximum subsidies the E.U and the U.S can give as Amber box subsidies is $60 billion and $20 billion respectively. On the other hand, the developing countries are relatively minor players in this tussle, are concern about protecting their markets and their small farmers besides demanding developed countries to reduce subsidies. India is also following the defensive approach. It causes great concern whether India could retain its competitiveness in the export of the commodities so as to expand export potential through the inclusion of more new value added commodities by devising appropriate export strategies. What are the potentials that exist in agricultural exports and what are the constraints that hinder the augmentation of agricultural exports? What kind of export strategies needed to enhance the agricultural export? These are the issues to be addressed and solutions for the same have to be arrived at. Constraints In Export

1) Lack of infrastructure and systems to cater to the export market particularly availability of air cargo at affordable cost and ports roads, cold chain etc, 2) Information flow along the value chain is very weak

3) Additional restrictions or raise quality issues by developed countries 4) Fears about large-scale imports of some agricultural commodities-edible oils. 5) Poor quality, improper post harvest techniques and poor packaging - fruits export. 6) Low exportable surplus, protective tariffs, stiff competition in the global market. 7) Poor market intelligence, lack of brand status to the commodities. 8. Lack of publicity and export in the form of raw materials are the major market related constraints. 9) High Technical standards.

10) Fruits and vegetables, food grains- India processed only two percent of its annual production 11) Lack of suitable varieties for processing
Agricultural Export Strategies
i) Contract Farming
As a viable strategy for farming, contract farming is popular among corporate sector in India, may be adopted wherever suitable. In India, contract farming is being done for wheat, basmati rice in Punjab with the help of MNC s, Rallis India for Sapota in Karnataka. In Tamil Nadu Contract farming for Sugarcane, Gherkins, Medicinal Plants is being undertaken successfully. Encourage Contract farming in the area where potential exists for the export of commodity concern. ii) Farmer’s Association and Agriculture Export

Farmers associations are to be encouraged by providing all kinds of promotional activities for the commodities having export potential. The success stories of Farmers Association excel in export front are Mahagrapes Grower’s Association, Maharastra and Andhra Pradesh Grape Growers Association. The success stories of farmers association in expanding export promoted by APEDA has to be extended to other states for the commodities which have export potential. iii)Developing new technologies and their quicker adoption would be needed in order to compete effectively in the international market. iv) Explore possibilities of importing seeds of processable varieties and multiplying with tissue culture methods. v) Encouraging establishment of agri export zone for various agricultural commodities which has got export potential. Tamil Nadu started a floriculture export zone at Hosur and another at likely at Nilgiri...
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