Gulf threats could put the mockers on India’s grand new agri-export policy
The government’s landmark programme was revealed last December as a means to double agricultural exports to US$60bn by 2022.
Then, the cabinet approved a policy that will lift all restrictions on organic and processed food, to help the government’s efforts to double farmers’ income by the same year.
Under the terms of the Agriculture Export Policy 2018, the government will invest around US$200m to set up specialised clusters in different states focused on specific produce, such as mangoes, pomegranate, bananas, grapes, tea, and drive exports.
The intention of its architect, commerce and industry minister Suresh Prabhu, is to integrate Indian farmers and their products with global value chains.
“The policy will promote organic, ethnic and indigenous products,” he said at the time.
It will “harness export potential of Indian agriculture through suitable policy instruments to make India global power in agriculture and raise farmers’ income”, the government said in a statement.
Industry groups welcomed the move. “The new policy will provide huge impetus to agri-exports from India,” said Ganesh Kumar Gupta, president of the Federation of Indian Export Organisations.
“The cornerstone of the policy is stability, which is very much needed for exports as it takes a long time to develop a market and switch on-off policy does not make us a reliable supplier.”
To back the policy, Prabhu called on state governments to formulate state- and product-specific export strategies while improving logistics and infrastructure in their regions.
But while the minister was conducting the first awareness sessions with politicians and civil servants late last month, news was emerging from the Middle East that might put the policy under pressure.
According to reports, there is a threat that Saudi and the UAE’s combined US$2.6bn of agriculture imports from India—or about 9% of Indian shipments— will be affected after Gulf officials warned their counterparts on the subcontinent that traders need to monitor quality better.
The governments of both Arab countries have informed the New Delhi about the interception of higher than permissible levels of pesticide residues in agri-commodities, particularly in vegetables such as okra and green chillies.
The Saudi and the UAE’s threats to halt imports, if enacted, might have a regional and international knock-on effect, especially as India exports a huge quantity of agricultural products to other countries in the Middle East, which is the country’s biggest export destination.
Cancellation of imports by Middle East countries might even prompt, say, the quality-conscious European Union to follow suit, putting a real dampener on the government’s plans to increase exports.
"Lots of products imported from India contravened the provisions of the food standards and safety of the Dubai Municipality… and Saudi Arabia has reported instances of interception of higher-than-permissible levels of pesticides residues in vegetables,” said UK Vats, general manager or the Agricultural and Produce Exports Development Authority, a government-backed standards organisation.
“We have issued several advisories to exporters seeking compliance of the quality norms as prescribed. Indian exporters, however, have not taken serious cognisance of these advisories. It has been intimated that if this situation continues, they are going to take strong action in the near future," Vats added.
Apeda has warned that violating such advisories would be viewed seriously and defaulting exporters would be made to pay for financial losses they may cause.
It is too early to know which direction this dispute will take but it has been clear for a long time that India must find better ways to ensure the quality and safety of its produce. Only once standards are applied by all players can the country successfully take advantage of grand and worthy export policies like the one recently announced.
