Finance Commission sets up group under ITC chief Puri on farm exports

FE Bureau
Finance Commission, ITC chief sanjiv Puri , farm exports, APEDA

The Fifteenth Finance Commission (FC) has set up an eight-member group under ITC chairman Sanjiv Puri to suggest performance incentives for states to encourage farm exports and promote crops that would "enable high import substitution". The group will also recommend appropriate incentives for states for the five years through 2025-26 to accelerate reforms in the agriculture sector, according to an official statement. The group will have to submit a report to the Commission in three months. The high-level expert group on agriculture exports will also have seven members - Radha Singh, former agriculture secretary; Suresh Narayanan, CMD of Nestle India; Jay Shroff, CEO of UPL; Sanjay Sacheti, country head at Olam Agro India; chairman of APEDA; Sachin Chaturvedi, director-general at RIS; and a representative of the food processing ministry.

Finance Commission chairman NK Singh had in October 2019 said that the panel was considering working out a model to incentivise states that undertake credible reforms in agriculture by easing or removing damaging rules and regulations. He also favoured incentives to those states that improved rail connectivity, "designed specifically for the promotion of exports".

Farm exports have lagged potential in recent years, thanks to the absence of desired structural reforms, mainly by states and the Centre's frequent curbs on exports of items like onions. According to APEDA's agrixchange portal, India's farm exports remained subdued at $38.5 billion in FY19, against $38.2 billion in the previous fiscal, underperforming an almost 9% rise in the country's overall merchandise exports. In the April-December period of this fiscal, farm exports dropped to just $26 billion, with analysts expecting the outbound shipments to touch only $35 billion in FY20.

The terms of reference of the new expert group include assessing "export and import substitution opportunities for Indian agricultural products and suggest ways to step up exports sustainably and reduce import dependence".
(commodities, semi-processed and processed) in the changing international trade scenario

It will also "recommend strategies and measures to increase farm productivity, enable higher value addition, ensure waste reduction, strengthen logistics infrastructure etc. related to Indian agriculture, to improve the sector's global competitiveness."

The group has to identify the "impediments for private sector investments along the agricultural value chain and suggest policy measures and reforms that would help attract the required investments".