Farm exports policy mulled

RUN-UP TO THE EXIM POLICY

The government is working on an agricultural export policy to leverage India's strengths in the sector in the international market.

Commerce and Industry Minister Kamal Nath is understood to have spoken to Agriculture Minister Sharad Pawar on the issue. The thrust on agriculture is in sync with the approach of the United Progressive Alliance government to give the rural sector a bigger say in economic policy-making.

Kamal Nath has convened a meeting of officials of the agriculture ministry and the Agricultural and Processed Food Products Export Development Authority (APEDA) this week to discuss the broad structure of the policy, highly-placed sources have told Business Standard.

They said the objective was to formulate a holistic policy for the sector, which would identify exportable products and leverage their export potential. Though the policy is still on the "drawing board stage", it could be part of the National Foreign Trade policy to be announced later this month.

The commerce department has also finalised a slew of incentives for the agriculture sector, which will be announced as part of the foreign trade policy.

These include allowing duty free import of inputs used in the agricultural processing industry, such as equipment, packaging material, building panels for housing processed products to maintain phyto-sanitary conditions under the export promotion capital goods (EPCG) scheme.

Moreover, the government will also expand the scope of the Assistance to States for Infrastructural Development for Exports (ASIDE) scheme to cover the agricultural sector.

"A sum under the scheme will be set aside for agricultural exports to develop facilities like cold storage for agricultural export zones. States will be asked to disburse the said amount under ASIDE for the purpose," an official said.

The government was also considering a proposal to lower the packaging credit from 8 per cent at present to around 5 per cent for the sector, they said.

Exports of agricultural and allied products are to grow to $5.85 billion this fiscal from $5.29 billion last year, according to the estimates of the commerce and industry ministry. Of this, processed food exports are targeted to grow 20 per cent to $904 million from $752 million in 2003-04.