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Journalism of Courage
The country’s farm exports continue to be under pressure from slowing world demand and crash in commodity prices. Total agri shipments fell by 20 per cent in dollar value terms in April-September, compared to the first six months of the previous fiscal. This comes on top of a 9.6 per cent decline in 2014-15 over 2013-14.
During the global commodity boom that began in the early part of last decade, India’s agricultural exports rose from a mere $7.5 billion to over $43 billion between 2003-04 and 2013-14. Higher exports helped boost farm incomes by pushing up domestic prices. This happened both on account of increased demand as well as the government having to align MSPs to global levels. The end of the boom has meant that the adjustment is now in the reverse: Since 2014-15, exports of most farm commodities have fallen, which has also adversely impacted domestic price realisations and rural incomes.
On the other hand, there has been no decline in imports. They have actually risen from $15.5 billion in 2013-14 to $21.2 billion in 2014-15, while registering an increase in this fiscal too. Much of this is explained by two big-ticket items: vegetable oils and pulses, the imports of which were valued at $10.62 billion and $2.79 billion respectively. Together, they constituted over 63 per cent of total agri imports in 2014-15. The first half of this fiscal has seen pulses imports jump further to $1.63 billion, from $1.27 billion in April-September 2014.
One result of falling exports and rising imports is that India’s farm trade surplus shrunk to $17.93 billion in 2014-15, after peaking at $27.72 billion the previous year. This year, it looks set to shrink further.
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