Punjab Requires an Immediate Agriculture Export Policy, says CM Bhagwant Mann has a lot of work ahead of him

*Paromita Das

Punjab’s Aam Aadmi Party (AAP) government, led by Bhagwant Mann, has been formed with a large mandate. Because of the various guarantees provided by AAP, it is a mandate for high expectations. Though the new government’s priorities will be multifaceted, one area that must be worked on diligently is farmers’ decent income, which must be implemented through a fine-tuned State Agriculture Export Policy (SAEP).

The Punjab farmers’ ever-longer agitation was not only for the repeal of the three farm laws, but also for a decent income in the face of agriculture’s poor financial gains.

The central government has had a Minimum Support Price (MSP) for several decades, but it has not solved the agrarian distress problem. The demand for a legally mandated MSP regime is likely to be feasible or sustainable in the long run, whereas an export-led agricultural revolution in the state to increase farmers’ income is a missed opportunity. The new government must work hard to capitalise on this missed opportunity to boost export-led agricultural growth in Punjab, which will boost farmer income and bring overall resilience to an agrarian state’s economy.

The demand for a legally mandated MSP regime is likely to be feasible or sustainable in the long run, whereas an export-led agricultural revolution in the state to increase farmers’ income is a missed opportunity.

In December 2018, the central government unveiled its Agriculture Export Policy (AEP), directing state governments to draught their own policies in order to meet the target of a decent farm income. Punjab, as the forerunner of the country’s farm sector, lacks a well-oiled state-owned agri-export policy for its farm produce, whereas Maharashtra is the first state to launch its own Agriculture Export Policy, seeking consistency in the center’s export policy to promote the state’s agri-export.

Despite the fact that farmer distress is visible throughout the state, Punjab ranks third in overall food grain production. Overproduction of rice and wheat due to a skewed MSP-dominated system causes water table depletion. Furthermore, it discourages farmers from growing other cash crops and horticulture products that are in higher demand, which could lead to an increase in farmers’ income. It appears logical that, rather than avoiding the market through MSPs, the AAP government should make serious efforts to prepare farmers for the global market.

Punjab needs a farmer-oriented strategy to achieve the twin goals of food security for the country and becoming a prominent agriculture exporter, which will put money in farmers’ pockets through critical export opportunities.

Since the green revolution in the 1960s until now, agricultural policy has prioritised food security and price stability over export-led growth. The central government is also spending a lot of money on procuring and maintaining food stocks above and beyond the strategic requirements, with warehouses full to the brim. The Green Revolution led by Punjab is now being shifted to an agriculture export revolution, which could lead to catching up with dominant agricultural exporter countries.

Punjab has enormous potential for increasing agri-exports.

The state will transition from the food bowl to India’s farm export bowl in the fields of dairy products, processed vegetables, buffalo meat, poultry, maize and maize products, basmati rice, honey, processed fruits, juices, fresh vegetables and fruits. The Punjab Agri-Export Corporation claims to have identified potential clusters based on production, processing, and existing infrastructure, with the goal of increasing the state’s contribution to India’s Agri and allied products from Rs 14,000 crore in 2017-18 to Rs 21,000 crore by 2022-23 and Rs 32,000 crore by FY 2027-28. Currently, the top importers from Punjab are Saudi Arabia, Iraq, the United States, the United Arab Emirates, the United Kingdom, Pakistan, Kuwait, Oman, Iran, and Vietnam.

The state produces and sells a lot of citrus (kinnow), guava, and fresh vegetables like chillies, okra, beans, peas, brinjal, potato, tomato, ginger, coriander, and other things. However, these crops and clusters are not considered for export and are mostly traded in local and other states’ markets.

Similarly, the new Punjab government can explore new avenues through free trade agreements (FTAs) with various nations to gain duty-free market access for its fresh and frozen bovine meat, poultry, fruits-vegetables, and dairy products. The UAE lifted a ban on the import of eggs and other poultry products from India in December of last year, recognising a long-standing demand.

Stringent pesticide residue chemical standards have hampered basmati rice exports to the EU, Japan, and the United States, among other places. Punjab, which accounts for more than 90% of basmati exports, has prohibited the sale of pesticide-containing chemicals such as Tricyclazole and Buprofezin. To become a rice export leader, Punjab must develop tailor-made varieties such as red rice, which is popular in the US, as well as some other varieties required by the EU and Japan.

To become a rice export leader, Punjab must develop tailor-made varieties such as red rice, which is popular in the US, as well as some other varieties required by the EU and Japan.

Inadequate connectivity and infrastructure Because Punjab is a landlocked state located far from seaports, it incurs high inland haulage charges as well as long transit times to transport its produce to seaports.

Farmers/exporters are charged exorbitant handling fees at cargo terminals, making export unprofitable.

There are no permanent perishable cargo centres at the international airports of Chandigarh and Amritsar.

Air cargo flights from Punjab airports to major importing destinations are not available.

There is no multi-modal cold chain network.

The way forward Farmers are unaware of the good agricultural practises that must be implemented in order to meet export quality standards. Connecting and training farmers produce organisations (FPOs) to export-oriented food parks for the production of processed cereals, fruits, vegetables, and dairy products.

The export potential of high-value organic products, horticulture, dairy, poultry, and fisheries has yet to be realised. Punjab should consider developing Dairy Export Zones (DEZs) and Organic Product Export Zones (OPEZs) in order to increase exports in a WTO-compliant manner.

Agricultural exports can be supported properly by processing infrastructure, institutional backup, standardisation, packaging, storage, logistics, marketing, and supply chain connectivity to dry ports, seaports, and airports.

We already have free trade agreements with Sri Lanka and Bangladesh, as well as the United Arab Emirates, and will most likely have agreements with Canada and Australia under the Comprehensive Economic Partnership Agreement (CEPA). It is also critical for India to enter FTAs with the EU, the US, and the UK, as this will likely increase Punjab farmers’ income significantly.

Increased investments in R&D and technology to improve new crop varieties and their products for global export competitiveness.

The author is the Vice Chairman of the Punjab State Planning Board as well as the Chairman of the ASSOCHAM Northern Region Development Council. The views expressed in this article are solely those of the author and do not reflect the position of this publication.