Post-liberalisation, Indian agriculture has been witnessing a paradigm shift from food security to income security, mono-cropping to crop diversity, and conventional crops to commercial/cash crops facilitated by free trade in the borderless world.

As agriculture is being treated as an agri-business enterprise of late, the role of commercial crops in improving farmers’ income, value addition and exports cannot be overemphasised. However, food security of India’s 1.42 billion population should not be compromised by encouraging cultivation of commercial crops.

India is a leading producer of high-value commercial crops like castor, chillies, cotton, tobacco and turmeric, as per the Food and Agriculture Organization (2022).

The main determinants of export of cash crops are comparative advantage, geographical proximity, natural resources, and trade barriers.Since commercial crops have been witnessing higher demand and more marketable surplus, income security of farmers may be ensured through the following policy options.

Improving yields and reducing costs: Productivity reflects efficiency level which depends on various factors such as agroclimatic conditions, extension services, genetic potential of seeds, investment in R&D, etc. Though India is the largest producer of chillies, productivity of China (6,728 kg/ha) was more than double that of India (2,974 kg/ha) in 2021.

Capitalising on the USPs: India can increase its exports by leveraging certain USPs like Geographical Indication (GI) certification of commercial crops. For example, turmeric produced in Erode (Chinna Nadan variety), has high curcumin content, which is a natural food colouring agent, as approved by World Health Organization.

Focus on value addition: Since India exports commercial crops with little or no value addition, its foreign exchange earnings are not significant. For better value addition, farmer producer organisations, primary agricultural cooperative societies, self-help groups, etc., can receive financial assistance under Agriculture Infrastructure Fund of the government, to create integrated common facility centres/community farming assets.

Development of agri-export clusters: Indian farmers may be encouraged to tap overseas markets in order to obtain remunerative prices through agri-export clusters. Further, there is a need for development of artificial intelligence based marketing system to expand our export basket in commercial crops.

Compliance with international standards: On the supply side, the number and spatial distribution of quality certification agencies may be enhanced; and on the demand side, exporters of cash crops should develop strong networks with importers, apart from participating in international exhibitions.

Risk management: To mitigate various risks in agriculture, location-specific crop research and farm advisory services may be extended mainly to small and marginal farmers apart from development of structured banking and financial products.

Development of right ecosystem: Institutions like National Commodity Boards, Indian Council of Agricultural Research, and Exim Bank need to foster and create linkages for development of right ecosystem for accelerating export of commercial crops. Also, private investment and research grants should be encouraged.

The writer is Director, Centre for Agri-Business Management, MANAGE, Hyderabad. Views are personal

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