The Commission for Agriculture Costs and Prices (CACP) has pitched for a stable, long-term agri-trade policy that will regulate exports and imports taking recourse to tariff measures, not quantitative restrictions.
In a discussion paper on “Farm Trade: Tapping the Hidden Potential,” the CACP Chairman Ashok Gulati said a stable and liberal trade policy with moderate duties of 5-10 per cent would go a long way in promoting agricultural growth.
The guiding principles of such a policy should be the alignment of domestic and international prices along long-term trends, while guarding against sharp spikes and troughs. When global prices fall below a pre-identified triggers, higher import duties may be imposed, and when the world prices move above the trend line, an export may be imposed on a calibrated basis, the paper said.
The key to implementing such a policy is to continuously monitor domestic and international price trends and identify the trigger points for prompt action. This responsibility can be entrusted to CACP, which tracks global prices on a regular basis. CACP can advise the Government when to hike or lower import duties or when to export duties, base on the global price movements, it said.
Further, the Commission can also help the Government in identifying the distortions in import duty structures of a crop complex and streamline them to get efficiency gains.
Highlighting the potential to increase agri-trade with East and South East Asian nations, the paper made a case for reviewing the exclusion of agri-products from the free trade agreement-type arrangements with Association of South East Asian Nations and with Japan and Korea.
India, a net agriculture exporter, had shipped agri-commodities worth more than $37 billion in 2011-12 against imports of around $17 billion.
India has emerged as the world’s largest exporter of rice, displacing Thailand and Vietnam. Besides, India has also emerged as the largest exporter of buffalo meat worth $3 billion beating Brazil, Australia and the US.