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Farm exports

Happy harvest

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Last year, one ton of kiwi fruit landed in top retail chains in Delhi and was lapped up by consumers who thought they were buying fruit imported from New Zealand. In reality, the shipments had come from Arunachal Pradesh. Next time, it may be passion fruit, again grown in the North East. "The quality is comparable with the best that you can find, " says Pravesh Sharma, managing director of the Small Farmers' Agribusiness Consortium part of the agriculture ministry.

But kiwis and passion fruit are not the only fruits growing in Indian orchards. India, which is negotiating a free trade agreement with the European Union, has sought lower import duty for a particular variety of bananas - Grand Nain. This long, yellow variety is now replacing the traditional ones such as Basrai across the country. "We are now the largest producer of this variety of bananas. So it makes sense for us to seek more market access, " says a commerce department official involved with the negotiations.

Umesh Sarangi, who is working with farmers growing bananas over 2, 000 hectares in parts of Maharashtra and Gujarat, feels the import duty impacts competitiveness. "Lowering it will really help since freight cost to Europe is high, " he says. Currently, a significant part of the 40, 000 tons produced here is shipped to the Middle East. Sarangi says the yields are better and the Grand Nain is less disease prone.

The story is repeated across several crops - pomegranate, onions, garlic, potato powder and gherkins. "There are several things which are produced just to meet the export demand, " says Apeda chairman Asit Tripathi.

Although the focus all these years has been on self-sufficiency and building buffer stocks, exports are booming. Ashok Gulati, chairman of the Commission on Agriculture Costs and Prices, predicts that farm exports are on course to cross the $40-billion mark this fiscal. After all, India is the largest exporter of rice and meat, apart from several other smaller agricultural products.

Sharma says it isn't just exports but the market that is determining what is grown. As a result, nearly three-fourths of the agriculture value chain is non-cereal produce, which includes poultry, fruits and vegetables.

While increasing overall productivity is a key challenge for policymakers, they can draw comfort from innovation in farms across the country. The numbers are telling. According to data in the latest Economic Survey, between 2000-01 and 2011-12, wheat and rice production rose 35% and 22%, respectively. But there was a sharper jump in case of several others. While the spurt in cotton output, which jumped 3. 7 times, is well documented, potato production has more than doubled. Similarly, there was a 75% jump in fruits and vegetable production and milk production saw an over 50% rise. Even laggards such as pulses and oil seeds have seen an increase of around 60%.

While India is the world's largest milk producer, it is the second largest fruit grower behind China. Within fruits, it is the largest producer of bananas, accounting for almost 30% of the production. In case of vegetables too, India ranked behind China but the gap was huge, the data revealed.

While farmers have been innovative and willing to use modern techniques and better seeds, a large part of the growth is driven by the private sector which has made bulk investment in agriculture. And, it's a pan-India phenomenon. Farmers in tribal areas are also shifting to hybrid maize seeds, boosting yields and production.

With the government and the private sector chipping in, the realisation for farmers is also expected to increase. Globally, farmers get around 50% of the shelf price. In India the level is around 20-30 %. But that share is slowly increasing. Sarangi, for instance, says that the farmers he works with get the market price for the bananas they grow.

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