The 31 Member Department-related Parliamentary Standing Committee on Commerce headed by Rajya Sabha Member, V. Vijayasai Reddy presented its 154th Report on the subject ‘Export of Agricultural & Marine Products, Plantation Crops, Turmeric and Coir’ to Chairman, Rajya Sabha on 26th August, 2020.
The Report was considered and adopted by the Committee at its meeting held on 27th July 2020. The Committee examined the issue in two meetings held on 27th December, 2019 and 12th March, 2020 with representatives of the Department of Commerce, Ministry of Commerce and Industry and the Federation of Indian Chambers of Commerce and Industry (FICCI) besides undertaking a study visit to Vijayawada, Bengaluru and Kochi from 6-10 January 2020 to interact with various stakeholders and representatives of the concerned State Governments involved in the development, research and export of agricultural, marine and plantation products.
The Parliamentary panel highlighted India’s position as one of the leading producers of cereals, fruits, vegetables, spices, milk, sugar, seafood products, etc. in the world due to its varied agro-climatic conditions capable of producing diverse crops.
The Report underlines the important role of agricultural, marine and plantation commodities sectors in national income and employment generation and their immense export potential and cites that the linking of production in these sectors to export markets will stimulate the growth thereby expanding farmers’ markets and enhancing income opportunities.
The Report gives prominence to the new Agriculture Export Policy launched by the Government in 2018 and its focus ‘to make India a global power in agriculture and raise farmers’ income’. The policy is in tune with the vision of Prime Minister Narendra Modi doubling the farmers’ income by 2022. With an objective to double the agricultural exports from USD 30 billion at present to over USD 60 billion by 2022, the Policy seeks to integrate the agriculture sector with the global value chains.
The Committee in its Report, while considering the thrust of the new Agricultural Export Policy and its ambition of doubling the agricultural exports by 2022 as well as the immense potential existing in marine and plantation sectors, gives an analysis of the structural and external constraints affecting the performance of exports in agricultural, marine and plantation sectors of tea, coffee, rubber, spices, turmeric, tobacco, coir and coir products. The recommendations of the Report focus on increasing the productivity in these sectors for becoming self-sufficient and strengthen their export base with the larger objective of making India a prominent global player in export of agriculture and related sector.
While taking note of the low share of export of agricultural commodities in spite of India’s 8th rank in world agriculture exports (World Trade Statistical Review, 2019 of WTO), the Committee recommended Agricultural and Processed Food Products Export Development Authority (APEDA) to focus on export oriented strategies emphasising upon improvement in the supply chain from farm to fork, promotion of marketing and export, infrastructure development, value-addition, etc. for boosting agricultural exports. It further recommended the Department of Commerce in coordination with Ministry of Agriculture and Farmers’ Welfare to undertake measures such as ensuring compliance with international standards in cultivation and production, easy access of farmers to high quality seeds, making available information about the global best practices, promoting scientific production of agriculture commodities, creating awareness amongst farmers about the quality standards, exploring new overseas markets, etc. for enhancing the export of agricultural products.
The Committee noted that India is the second largest producer of fruits and vegetables in the world with production of 311.7 million tonnes. Indian dairy market is among the largest and fastest growing market in the world. India is the largest producer of milk in the world. Observing the growing prospects of exports in horticulture and dairy sector especially in the processed segment (processed fruits, juices, vegetables, dairy products, etc.) and the constraining issue of tariff and non-tariff barriers, the Committee recommended ensuring compliance to the international quality, sanitary and phyto-sanitary standards. It has also urged the Department of Commerce to expedite the implementation of Electronic Data Interchange (EDI) system to reduce the high procedural costs and timelines involved in exports for ensuring ease of doing business.
Noting the significance of Agriculture Export Policy, the Committee recommends that its implementation must be done in close cooperation and active participation of State Governments. Also, while supporting the private sector participation in agriculture export, the Committee stressed upon the private equity participation and capital infusion in Farmers’ Producers Organisations (FPOs) for making them financially strong thus providing the farmers direct market linkages and giving them better price premium for their produce.
Referring to the vast potential in harvesting marine resources due to India’s long coastline, the Committee suggested to the Marine Products Export Development Authority (MPEDA) to undertake measures for value-addition and quality standards, establishing testing laboratories near marine processing centres and e-auction platform, modernize dilapidated fishing harbours, upgradation of post-harvest infrastructure, devising specific scheme for Tuna Fish production and its export given its huge potential, appropriate incentives to the marine exporters.
The Committee noted the stiff competition faced by Indian tea exports from the countries of Kenya for CTC tea and Sri Lanka for Orthodox tea in the international market. Considering the low share of tea exports which is about 19 per cent of the total tea production on account of lack of exportable surplus in spite of India’s position as the largest producer and consumer of black tea in the world, the Committee recommends to make the tea production demand driven and export centric and urges to devise strategies and schemes for production of value added and high quality varieties of tea including organic and green tea and brand promotion of Indian tea to expand its global market base.
The Committee noted India’s position as the 7th largest producer of coffee in the world with exports amounting to 75 per cent of the total coffee produced in the country. Coffee Board in the country is responsible for promoting Coffee exports from the country. Referring to the considerable decline in coffee exports since 2017-18, the Committee stresses upon the need of framing export-centric strategies for expanding coffee production in both traditional and non-traditional areas, value addition, marketing and brand promotion to spur export. It also cites concerns on the application of Rule 7B(1) of Income Tax Rules of 1962 hindering small and marginal coffee growers to undertake post-harvest processing methods of curing and drying of coffee. It recommends to devise a crop insurance scheme in plantation sectors including coffee at the earliest to protect growers from the risks of price fluctuations and weather uncertainties. The Committee also desires to ensure the export promotion of five Geographical Indication (GI) varieties of Indian coffee, namely, Araku Valley Arabica, Wayanad Robusta, Coorg Arabica, Chikmangalur Arabica and Bababudangiri Arabica coffee in international markets.
Taking note of India’s sixth position in the global ranking in terms of production of Natural Rubber, the Committee expressed its concern on the decline of volume of export from 5072 tonnes in 2017-18 to 4551 tonnes in 2018-19 due to the differential prices of Natural Rubber in domestic and international market. It urges that India should engage with WTO to increase the bound rate fixed on block rubber imports to boost the rubber exports. It further recommends to encourage production of Natural Rubber in the North-East states as well as in non-traditional regions of India having a huge potential to become rubber export hubs.
The Committee noted that India is the largest producer, exporter and consumer of spices in the world accounting for 47 per cent in quantity and 43 per cent in value of the global spice trade. The research, development and marketing of Cardamom and export promotion of 52 spices scheduled under the Spices Board Act, 1986 is undertaken by the Spices Board. Noting the export of Chilli accounting for 43 per cent of the overall export of spices, with contribution of 28 per cent of the total value of spices exported from India, the Committee recommended to create a ‘Development Wing’ within Spices Board to promote the export of chilli. It also proposed to create an Analysis Wing for analysing and revisiting Plant Quarantine standards for import of products being used for value addition and re-export of spices.
The Report expresses concern on inadequate funds allocation to Commodities Boards of Plantation Sectors leading to inefficient functioning of the schemes and development programmes and recommends the Department to have regular consultations with these Boards to equip them with necessary funds by engaging with Ministry of Finance.
The Committee noted that with 1 million tonnes of turmeric being produced annually, India is the largest producer and exporter of turmeric in the world. The export of turmeric has increased from 86,000 tonnes in 2014-15 to 1,33,600 tonnes in 2018-19. The major turmeric producing States are Telangana, Maharashtra, Tamil Nadu, Andhra Pradesh, Gujarat and Karnataka. On being apprised by the turmeric exporters on the decrease in cultivated area and decline of exportable surplus of turmeric in the country, the Committee recommended that the Spices Board should be assigned the development and production of turmeric by restructuring its mandate. It urges the Government to explore the feasibility of fixing a Minimum Support Price for turmeric to promote its production and export and maintain India’s pre-eminence in world market.
The Report noted the position of India as the third largest producer and exporter of tobacco in the world contributing Rs. 6001.02 crore (2018-19) in terms of foreign exchange to the national exchequer. The Tobacco Board established under the Tobacco Board Act, 1975 undertakes promotion of export of tobacco and tobacco products. To spur tobacco exports from the country, the Committee recommends to explore prospect of allowing Foreign Direct Investment (FDI) in tobacco sector albeit in a regulated manner, adequate allocation of funds for research and development activities, imposition of levy on sale of cigarettes to utilize it as a Market Stabilization Fund and extension of export incentive schemes to tobacco exporters. The Committee also desires that the Department of Commerce should undertake measures in coordination with Ministry of Agriculture and Farmers’ Welfare to prevent further shrinkage of land under tobacco cultivation and explore the feasibility of establishing export only tobacco farms specifically for export purpose.
The Committee appreciates the important role of Coir Industry it plays in rural economy of the coconut producing States of Kerala, Tamil Nadu, Karnataka, Andhra Pradesh, Odisha, etc. providing employment to lakhs of people with 80 per cent of the workforce being women thus contributing significantly to women empowerment. The Coir Board set up under the Coir Industry Act, 1953 seeks to promote the development of domestic and export markets for coir and coir products. The Committee noted the constant increase in exports of coir and coir products for the last five years, that is, from 2014-15 to 2018-19 from 626666 tonnes to 964046 tonnes respectively as per the Department of Commerce. It urged the Coir Board in coordination with Department of Commerce to make concerted efforts and devise appropriate strategies to further boost the export of coir and coir products. Furthermore, taking note of the prospects of the town of Pollachi in Tamil Nadu with 1.2 crore coconut trees and 600 fibre and coir pith production units to become an exporting hub of coir and coir products, the Committee recommended to include Pollachi in the list of Towns of Export Excellence (TEE) of the Foreign Trade Policy (2015-2020). It further suggests to explore the other towns with similar potential in coconut producing regions to include them in the list of TEE.
The Committee underlines the importance of the robust research infrastructure/ facilities and adequate and efficient workforce in the Commodities Boards and recommends for setting up of advanced research centres/centres of excellence for upgradation of research and technologies for value addition, organic production, quality control, product development, transfer of technologies to the farm, etc. The Report also exhorts to take measures such as access of export credit at reasonable rates to the exporters in agricultural and plantation sectors and timely implementation of WTO compliant scheme of Remission of Duties or Taxes on Export Products (RoDTEP) replacing the Merchandise Export from India Scheme (MEIS) with rates beneficial to the export sector.
The measures for promoting exports in agricultural and plantation sectors assume more significance in the context of COVID-19 pandemic and the adverse impact of the pandemic on export front would require concerted measures by the Government and other stakeholders. The Committee feels that the Department of Commerce should identify commodities and products where India has comparative advantage and prioritise target countries for their export, put in place the WTO compatible export subsidies for predictable and consistent regime for exporters, etc. It urges the Government to play proactive role in international trade/economic forums in strengthening multilateralism and ensuring fair world trade governance in the post-Covid19 phase.