The commerce ministry has circulated a Cabinet note among various ministries for their views on a proposal to reserve 5 per cent of the total output of various agricultural items like wheat, rice, coarse grains, pulses and sugar for exports every year.
Officials said that comments of other ministries were awaited before the proposal was formally put for the Cabinet's consideration.
According to the officials, reserving 5 per cent for exports was a too ambitious and were hopeful of an agreement on a 2 per cent target.
The move is being contemplated for several reasons, including arresting the sharp fall in the share of agricultural exports.
A stable export policy will also ensure that Indian exporters do not lose their markets and customers due to uncertain supplies and that they get fair prices for their exports.
The share of exports of agricultural and allied products in India's total export basket had declined from 21 per cent in 1996-97 to an estimated 13.2 per cent during April-January 1997-98.
In November last year, the government had taken a decision to allow exports of wheat products and pulses in consumer packs, subject to a review once every six months.
At the same time, a decision had also been taken to free agricultural commodities for exports, with adequate checks and balances.
The commerce ministry has been pushing for this for a while. In fact, a 17 per cent decline in agricultural exports this year is partly attributed to the ad hoc policies followed by the government regarding such exports. Non-controlled exports, the officials argue, have not done too badly.
The need for a stable agricultural export policy has been felt in view of the fact that exporters, at times, have failed to fulfil their commitments since the export quota for the year is uncertain and is at times withdrawn in case of domestic shortages.
Sources said that the government is exploring whether it is feasible to fix a certain percentage of the total output of a product as the exportable limit.
However, this percentage has been a subject of much debate.
Ministry sources explained that often in agricultural commodities India may not get a fair price since the policy is ad hoc and sudden entry or withdrawal into the commodity market can result in price fluctuations which need not work in the country's favour.
Various sections of the government are of the view that setting aside a percentage of the total production in every year is not possible in a country like India where the dependence on monsoons is heavy.
