Agri Export Zones to boost agri exports from India

India is an agriculture-based economy, where 43% of its people remain employed in agricultural and allied activities. Agriculture along with other related fields like forestry and logging provides employment to 60% of India's population. Agriculture accounts for almost 19% of the Gross Domestic Product and 9% of the total exports. India's agro-climatic conditions and rich natural resource base sets prelude for doing very good on the agriculture front. Today, India has become the world's largest producer across a range of commodities, like coconut, mango, banana, milk & dairy products, cashew nuts, pulses, ginger, turmeric and black pepper. It is also the second largest producer of rice, wheat, sugar, cotton, fruits and vegetables. India needs to leverage the production capability for economic gains and being self sufficient to meet the domestic consumption.

With a view to promoting agriculture in the country and to fetch remunerative returns to the farming community in a sustained manner, the concept of the Agri Export Zones (AEZs) was floated. AEZs are to be identified by the State Governments evolving a comprehensive package of services provided by all State Government agencies, State agriculture universities and all institutions and agencies of the Union Government for intensive delivery in these Zones. Corporate sector with proven credentials are encouraged to sponsor new zone or to takeover already notified AEZs or part of such zones for boosting agri-exports.

Services would be managed and coordinated by State Government/corporate sector and would include provision of pre/post harvest treatment and operations, plant protection, processing, packaging, storage and related research & development etc. According to the government's agri-trade promotion body, Agricultural and Processed Food Products Export Development Authority (APEDA) has been nominated as the Nodal Agency to coordinate the efforts on the part of Central Government negotiations.

The entire effort of AEZ focuses on the cluster approach of identifying the potential products, the geographical region in which these products are grown and adopting an end-to-end approach of integrating the entire process right from the stage of production till it reaches the market. There would also be a need to identify/enlist difficulties/ problems encountered at each stage. These difficulties could be procedural in nature or may relate to a particular quality standard. Agri Export Zones can yield benefits like strengthening of backward linkages with a market oriented approach; product acceptability and its competitiveness abroad as well as in the domestic market; value addition to basic agricultural produce; bring down cost of production through economy of scale; better price for agricultural produce; improvement in product quality & packaging; promote trade-related research and development; and increase employment opportunities

Once the project proposal of a State has been approved by the Committee, a Memorandum of Understanding (MoU) is signed between APEDA (on behalf of the Government) and the State Government for providing possible assistance at each stage of the project. The responsibilities of the State government are defined in the MoU. To enable the Agri Export Zone achieve the objectives of the concept and to make the projects viable, it is necessary that the Central and State Governments work closely with each other. This would imply certain pro-active steps to be taken by the States with regard to identification of a State Government institutions/agency which will be responsible for implementation and coordination of the entire activity; single window problem solving desks should be created in the offices promoting zonal approach to agriculture exports; adequate availability of infrastructure, inputs, electricity, etc. and redeployment of extension officers in the Export Zones who would interact regularly with APEDA and organise training/activity on a regular basis with a definite action programme.

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Other potential crops that can be tapped where India has a geographical and resource advantages are tea, coffee, spices and cotton. India is the world's second-largest producer of cotton. The focus on this crop can bring a rise of 10 per cent to about 32 million bales (one bale is equal to 170 kg) in the 2009-10 season (October-September), provided it gets high support price and more sowing of high-yielding Bt seeds. India's coffee output is pegged at 3.1 lakh tonne in 2009-2010, 4.4 per cent higher compared to 2008-09, according to the post-blossom estimates released by the Coffee Board. India is likely to climb up in the ranking list of world top 10 coffee-producing countries if the actual output in 2009-10 matches estimates.

Another area which AEZ can act as a catalyst of growth is food producing industry. The food processing sector, which contributes 9 per cent to the GDP, is presently growing at 13.5 per cent against 6.5 per cent in 2003–04, and is going to be an important driver of the Indian economy. This generates huge employment and helps in getting better price for the generic good and services. APEDA and Export Inspection Council (EIC) are providing necessary technical inputs and financial assistance through its schemes for Infrastructure Development Scheme for Quality Development to boost agri export. Market Development and the Scheme for Research & Development have been making efforts to expand flower exports. As a result of these measures; the exports of flowers have increased from Rs.4875 lakh during 2007-08 to Rs.6563 lakh during 2008-09 (up to February 09).

Centre and State forging an alliance to boost agricultural export is now showing good results despite the global recession still lingering on. The country's farm product export in value terms has surged about 40% to over Rs.80,600 crore in the last three years, with food grains, oil meals and fruits and vegetables witnessing maximum demand overseas. India's agri-export turnover is expected to double in the next five years, according to APEDA, Agri-export turnover is set to rise from US $ 9 billion to nearly US $ 18 billion by 2014. At present, around 70 percent of the country's agricultural and processed food exports are to developing countries in the Middle East, Asia, Africa and South America. With the growing population resources imbalances and growing need for food and livelihood security, initiative like AEZ is a time honored investment.


Publication date: 2/16/2010


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