Re rise will push farm sector into crisis

The country’s farm sector will slip into a deeper morass as a result of rupee appreciation that is hurting exports of agricultural products, a top economist has said. “If rupee appreciates, you will get lower prices for your products as all agriculture prices are fixed in dollar terms,” noted economist and Kerala State Planning Board vice-chairman Prabhat Patnaik.

India exports agricultural products like tea, coffee, sugar, spices, to name a few, and the appreciating rupee has dented the margins on the overseas sales of these commodities. Kerala’s LDF government has repeatedly asked the central government to set up a committee comprising nominees from the states and the Centre to address the issue, Patnaik said. Though the state had raised the matter at the recent National Development Council meet, the Centre did not appear to be keen on tackling the issue. “Earlier, RBI used to intervene and control the exchange rate. But under the new economic policy, they are not holding the rupee value,” he said. The free trade import policy and free-floating currency has compounded the problems in the agrarian sector at a time when it was slowly trying to recovering, he said.