'Govt can earn Rs 25k cr by exports of wheat lying in open'

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SME Times News Bureau | 20 May, 2013
The government-owned Food Corporation of India (FCI) can earn over Rs 25,000 crore through exports of about 17 million tonnes (mt) wheat lying in its open warehouses across various states, according to a just-concluded study by apex industry body ASSOCHAM.

"Since the quantity of wheat stored in open warehouses would rise further with expected arrival of wheat this summer, it would be more sensible to export the same and reduce the potential losses due to food grain deterioration together with the interest and storage charges incurred by FCI," said a study titled 'Agri Exports: High Potential and Action Agenda,' conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

Besides, such exports of food grain, while earning foreign exchange would also trim the current account deficit running into USD 75 billion each year.

"The study has strongly advocated a long-term agricultural exports promotion policy to bring improvement in yields, product-wise export zones, incentives to private sector, infrastructure investment and targeted export levels is imperative to raise economic growth and narrow down the rising current account deficit, more so as agricultural exports have the potential to be the second most significant foreign exchange earner after software and services exports," said the ASSOCHAM president, Rajkumar Dhoot, while releasing the chamber's study.

"The government should set a USD 50 billion target for agricultural exports for the current financial year of 2013-14 which should subsequently be raised to about USD 70 billion in 2017 to help raise rural households' income, reduce rural poverty, boost the gross domestic product (GDP), raise farm employment and spur the overall demand for fast moving consumer goods (FMCG)," said Dhoot.

"This would further drive productivity in our farms and orchards, promote crop diversity and produce specialized items to meet specific global demands improving the rural incomes on a sustainable basis thereby transforming the rural economy."

As per the estimates, total exports of the agriculture and allied products have increased from over USD 24 billion in 2010-11 to about USD 42 billion in 20012-13. "This portrays India's potential to raise agricultural productivity through rise in agriculture investments and a well-planned diversification in output."

There is a huge scope for increasing agricultural productivity in the eastern states of Bihar, Ranchi, Chhattisgarh, Assam, West Bengal and others points out the ASSOCHAM study.

"An average wheat output of 4,415 kilograms (kg) per hectare is raised in Punjab while Bihar accounts for an average yield of a meagre 1,946 kg/hectare," said Dhoot.

"This is an unacceptable situation as Bihar is rich in water resources and annual rainfall unlike Punjab which is faltering on both aspects."

In its study, ASSOCHAM has therefore stressed upon the need for greater investment and implementing new and modern agricultural practices in the eastern region of the country where output has been steadily increasing.

"The aforementioned states located in the eastern belt of India need to provide constant support to the small and marginal farmers to improve the overall agricultural productivity of their respective states," said Dhoot.

"The micro-irrigation practices like that in Gujarat should become standard operating procedure in water management in eastern states."

The ASSOCHAM study has also laid thrust upon giving encouragement to private sector participation for luring investments to tap the vast potential in exports of a huge variety of fresh fruits produced on a large scale across India.

"There is a huge scope to increase India's share from a meagre two percent in exports of fresh fruits in the major fruits importing countries throughout the world," Dhoot added.