The Vaikunth Mehta National Institute of Cooperative Management (VAMNICOM) in collaboration with the Confederation of NGOs of Rural India (CNRI) and support of the National Cooperative Union on India (NCUI) organized a conclave, “Export Market for Agriculture Commodity through Collaboration” on February 12 and 13.
Recent developments in international trade and alterations in India's foreign trade policies have far-reaching implications for India's agricultural sector in general and agricultural exports in particular. In the case of exports of many agricultural commodities, India has been losing its competitive advantages to other countries due to lower productivity levels and low modernization of the agricultural sector. Despite this, India has a distinct competitive advantage in several agricultural commodities. It is among the top three producers in the world for several agricultural commodities, but the share of world exports in agricultural commodities is barely 1%. Traditionally, the core of India’s agricultural development has been to achieve self-sufficiency in food grains and major non-food crops. With the rapidly changing global economic environment, it is now necessary to shift the focus from self-sufficiency to export orientation. The objectives of the conclave were to:
- To identify the market potential of select Agro commodities post COVID-19 in foreign markets.
- To create awareness and provide the platform to all the stakeholders to learn the standard practices and procedures related to Agricultural International trade.
- To brainstorm the current export measures specific to commodity and identify the gaps and propose intervention for capability development of appropriate stakeholders.
ICA-AP Regional Director, Balasubramanian Iyer, chaired the session on Export Market for Agriculture Commodity through Collaboration. The panellists were, Dr. Hema Yadav, Director, Chaudhary Charan Singh National Institute of Agricultural Marketing; Shri Rishi Nathany, Business Leader in Financial Services, Multi Commodity Exchange of India; Dr. Sushansu, Secretary, Agricultural and Processed Food Products Export Development Authority; and Dr. Ruchir Tiwari Senior Director, Jubilant Ingrenia. The focus of the session was on how agriculture can move from self-sufficiency to export orientation and the need for agriculture to generate an exportable surplus of food grains and non-food grains after meeting the domestic demand at the world prices.
Mr. Iyer in his remarks mentioned that Collectives which include Cooperatives, Farmers Organizations, Farmer Producer Organizations act as the link between farmers and other stakeholders are important constituent. The recent COVID-19 pandemic and the three farm laws in India have put agriculture at the centre of discussion – reforms needed to improve the lives and livelihoods (capabilities, assets, income and activities required to secure the necessities of life) of farmers. The impact of climate change also necessitates urgent action on resilience and mitigation efforts. Also, reforms should not ignore the needs of women who constitute a significant workforce in agriculture and allied activities (dairy, beekeeping, …..). Collectives of women also play an important part.
ICA each year comes out with the World Cooperative Monitor, which ranks the Top 300 Cooperatives in the world. The 2020 edition of the Monitor which came out recently, has the top 300 Cooperatives having a turnover of 2.14 trillion USD. IFFCO ranks as the number one cooperative in terms of turnover/ GDP per capita. Agriculture cooperatives (104, 34.7%) and wholesale and retail (57, 19%) account for 53.7% turnover; and agriculture cooperatives (97, 32.3%) and wholesale and retail (64, 21.3%) account for 53.6% when we take the ratio of turnover over GDP per capita (correct the bias in calculating the effect of different levels of national economic context). The data shows that cooperatives are big when we take production and consumption together.
But, while cooperative agricultural production has kept up with global growth, its share of retail and wholesale is declining, and this is where the real added value lies. Cooperative‐produced agricultural products represent a sizeable opportunity but with the share of coops in global retail shrinking, producers are likely to pursue a diversified client base. Trade between cooperatives accounts for one-quarter of one per cent of global agricultural trade and cooperatives trading with other kinds of enterprises are well represented in global agricultural trade with a 15% share of the total.
There is an opportunity to grow the share in these as agriculture has a higher potential for export growth than other sectors. Agricultural cooperatives are particularly well placed to increase their participation in global trade, due to the nature of trade in agricultural goods as trade regulations tend to be less restrictive on agriculture than other sectors involving cooperatives. For example, insurance, banking, goods, unlike many services, are mobile across borders; and agricultural commodities (and to a lesser extent processed agricultural goods) are not subject to significant variation in specifications by market. However, there are barriers along the value chain that inhibit trade. These related to production, harvesting, aggregation (insufficient, small scale); sorting, processing and merchandising (inconsistent quality, compliance); trade and wholesale distribution (regulating and logistics); retail and consumption (resources and awareness); and cross-cutting issues relating to managerial and capital requirements. Despite the challenges, cooperatives in a number of countries are engaged in exports and cross-country collaborations.
