The report, released by the Associated Chambers of Commerce and Industry of India, refers to the 17m tonnes of wheat it has identified as going to waste.
“Since the quantity of wheat stored in open warehouses would rise further with the expected arrival of wheat this summer, it would be more sensible to export it and reduce the potential losses due to food grain deterioration, together with the interest and storage charges incurred by the FCI,” the report said.
Account deficit
Assocham also argued that the foreign exchange such sales would generate would also trim India’s current account deficit, which is running at around US$75bn this year.
“The study strongly advocates a long-term agricultural exports promotion policy to bring improvement in yields, incentives to the private sector and investment in infrastructure,” said the Assocham’s president, Rajkumar Dhoot. “[To do so] 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.”
Moreover, Dhoot called on the government to set a US$50bn target for agriculture exports over the current financial year, and then raise this to US$70bn in 27.
“This would further drive productivity in our farms and orchards, promote crop diversity and produce specialised items to meet specific global demands improving the rural incomes on a sustainable basis thereby transforming the rural economy,” Dhoot said.
Agriculture exports have surged from from over US$24bn in 2011 to around US$42bn last year. “This portrays India’s potential to raise agricultural productivity through rise in agriculture investments and a well-planned diversification in output,” he added.
Eastern states
Assocham also called for an increase in agricultural productivity in India’s eastern states, having found significant scope for development there.
“An average of 4,415kg per hectare in wheat output is raised in Punjab, while Bihar accounts for a meagre 1,946kg per 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.”
He added that the eastern states should provide greater support to smallholders and called for more research and development to find ways to keep production costs in check.