A wider field

The farm sector is increasingly export oriented and there is room to grow if policy keeps pace.

The farm sector is increasingly export oriented and there is room to grow if policy keeps pace.

While Indias overall exports are only now beginning to rise,after months of shrinking,farm exports have been rising steadily,and dramatically,with each passing year. In just the last four years,farm exports have risen from 14.3 billion in 2008-09 to 31.9 bn in 2012-13. Their share in Indias total exports has risen from 7.2 per cent to 10.6 per cent in the same period,and to 10.8 per cent in the April to August period this year. Indeed,while it is a common belief that Indias farmers are slow to change,apart from being inefficient,none of this is true. As it became evident that Bt cotton raised productivity significantly,most farmers switched to it as a proportion of the total crop,it rose from nearly zero in 2001-02 to over 81 per cent by 2007-08,as a result of which India is the worlds second-largest exporter of cotton. When hybrid maize offered a similar jump in productivity,farmers took to it in a big way.

From around 5 per cent in 1990-91,the farm sectors internationalisation loosely measured by the sum of farm imports and exports as a proportion of farm GDP rose to 18 per cent by 2011-12,not quite the picture of either a backward or an inward-looking farm sector. None of this,needless to say,could have taken place had the sector been,as is often portrayed,starved of investments. After stagnating at around 8-9 per cent of agri-GDP in the 1980s,farm investments are up to over 20 per cent.

Indias relative inequalities Punjabs wheat yields are 4,415 kg per hectare as compared to Bihars 1,946 kg per hectare suggest that the scope to increase exports is large. Significantly,there is great scope for growth in the next few months. In the case of wheat,where exports touched 2 bn in 2012-13,India is competitive,given current global prices. Juxtapose this with the FCI sitting on grain far in excess of what it needs and with enough storage capacity to keep just around 60 per cent of this safe the rest is under tarpaulins in open fields. So,exports of wheat can easily jump to 3 bn this year,according to estimates by the CACP chief,Ashok Gulati. Instead,as global prices fall,the government is slow to cut prices,the opportunity is being frittered away in the absence of adequate storage facilities,it is likely the grain will rot.