From Plate to Plough: How sustainable are our agricultural exports?

Nevertheless, our foremost concern with the surging rice and sugar exports is on the sustainability entrance.

By Ashok Gulati & Ritika Juneja

Agricultural exports touched $41.8 billion (bn) in FY21—a development of 18% over FY20—bringing cheer in authorities circles. Juxtaposed in opposition to a goal of $60 bn the Modi authorities had got down to obtain by 2022, it falls a lot quick. From a strategic viewpoint, the important thing situation is whether or not this charge will be sustained? For that, we have a look at the composition of agri-exports.

Rice ranks first in agri-exports, with 17.7 million tonnes (mt) valued at $8.8 bn. It’s adopted by marine merchandise ($6 bn), spices ($4 bn), bovine (buffalo) meat ($3.2 bn), sugar ($2.8 bn), and so on (see graphics). Of those, rice and sugar elevate considerations about competitiveness and environmental sustainability, as these are water guzzlers and closely subsidised by means of low cost/free energy for irrigation in addition to fertilisers. On high, sugar exports have been additional subsidised to clear extreme home shares. This has led many sugar-exporting nations like Australia, Brazil, Thailand, and so on, to register a case in opposition to India at WTO.

Nevertheless, our foremost concern with the surging rice and sugar exports is on the sustainability entrance. India is a water-stressed nation with per capita water availability of 1,544 cubic-metres in 2011, more likely to go down additional to 1,140 cubic-metres by 2050. One kg of sugar invariably has digital water consumption of about 2,000 litres. Exporting 7.5 mt of sugar implies exporting at the least 15 bn cubic-metres of water. In case of rice, irrigation necessities for one kg range from 3,000-5,000 litres, relying upon topography. If we take a mean of 4,000 litres, and assume that half of this will get recycled again to groundwater, exporting 17.7 mt of rice means digital export of 35.4 bnn cubic-meters of water. Collectively rice and sugar exports indicate India exported over 50 bnn cubic-metres of water. Any sustainable technique for rice and sugar exports should guarantee these are produced with a lot much less water by adopting applicable farming practices akin to alternate wetting drying (AWD), direct seeded rice (DSR), drip irrigation, and so on.

However, at a broader degree of agri-trade, it might be famous that within the seven years of the Modi authorities, agri-exports have remained decrease than the extent reached in FY14 ($43.3 bn) (see graphics). That’s the 12 months when most agri-trade surplus (exports minus imports) was generated ($27.8 bn). That’s additionally when Indian agriculture was most globally built-in, with agri-trade (exports plus imports) touching 20% of agri-GDP. It has slid to 13.5% by FY21, indicating India is changing into much less aggressive in exports and extra protectionist in imports, presumably within the title of Atmanirbhar Bharat. An extended-term technique ought to purpose at conserving scarce water sources, cut back carbon footprint, with decrease tariffs. Nearer analysis of non-basmati exports reveals one other fascinating truth: These exports are literally sourced not solely below-MSP, but in addition beneath the typical mandi costs within the nation, after one adjusts for freight from mandi to port and loading fees on the port. How does that occur? One risk is that a part of the provides by means of PDS and PM Garib Kalyan Yojana are leaking out and swelling rice exports.

It’s excessive time that policymakers revisit the complete gamut of rice and sugar techniques, from their MSP/FRP to their manufacturing and procurement, guaranteeing ‘extra crop per drop’. In case of rice, procurement should be restricted to the wants of PDS, and inside PDS it’s excessive time to introduce the choice of direct money transfers. All these will go a protracted solution to promote higher diversification of our agri-systems, higher use of our scarce water provides, lesser GHG emissions, save on unproductive use of monetary sources locked up in burgeoning grains shares with the FCI. And all these financial savings can be utilized for doubling investments in agri-R&D to enhance productiveness on sustainable foundation and enhance farming practices for minimising carbon emissions. An export-led technique additionally must minimise logistics prices by investing in higher infrastructure and logistics. Solely then one can guarantee sharing the returns of those investments with farmers to present them higher deal by way of increased and extra secure incomes.

Gulati is Infosys Chair Professor for Agriculture and Juneja is a Advisor at ICRIER