dc.description.abstract |
With the opening of Indian agriculture and high level of integration of domestic
markets with the world markets there is high dependence of many plantation
crops on export markets directly or indirectly. This along with the dynamic
policy environment calls for an analysis towards the export performance,
potential and competitiveness of plantation crops in India. The study examines
the changing patterns of international trade in plantation commodities and
analyses the factors contributing to or retarding the competitiveness of
plantation commodities in India. Unlike the earlier studies, which have used
protection coefficients as indicators of competitiveness, the study uses the ratio
of unit export prices (f.o.b) to examine the performance of select plantation
commodities in India. From the analysis of unit export price ratios of select four
commodities, coffee, tea, cashew and pepper, we see that price performance in
international markets has been good only for cashew. The poor price
performance of coffee, tea or pepper is a reflection of lower value addition or
poor quality against the competitors. Cashew nut which has good price
performance is an exception among the commodities chosen for analysis, which
can be attributed to higher attention paid by the policy makers for cashew
processing in India through promotion of processing industries. However, the
sector currently depends heavily on imports of raw cashew which calls for
measures to boost the domestic production within the country. Though tariff
barriers are very limited in the case of plantation commodities under study, non
tariff barriers continue to retard competitiveness of plantation commodities in
India. The need for certification emerges as a major non-tariff barrier for coffee
and tea. In the case of coffee, the threat becomes intense to India when the
competitors are increasing the share of sustainable coffee in the world markets.
There are lessons to India from competitors in Central and Latin America who,in addition to leveraging on technology to increase the yield have made
certification possible to a great extent without much cost with the existing local
institutions and infrastructure. Finding a low cost model for individual farm
certification calls for collaboration among a range of local and international
actors which needs to be addressed through the right set of policies. One of the
keys to the expansion of sustainable coffee in India is co-operatives which is
currently absent in the coffee growing districts of India. Stringent rules of
labeling in developed markets, quality standards, maximum residual limits, food
safety, ethical practices are the major non-tariff barriers confronting exports of
tea from India. Investors have also been slow to invest in India for tea
processing due to high costs brought about by the hefty taxes levied on the
activity. India also lost some of its international markets for tea due to lack of
strategic government policies, especially, with Russia, Poland and Pakistan.
Improved trade relation with Pakistan would open doors to one of the major
markets of the world. False certification of re-exports of poor quality tea is a
serious concern, which needs immediate policy attention. To make the Indian
cashew more complaint to standards there is a need to attain ISO, GMP and
HACCP certifications which is currently obtained by only a few cashew
processors. Similarly for spices, the largest threat among the non-tariff barriers
is with the multiplicity of rules governing the sanitary and phytosanitary
requirements. Wide difference on the rules and procedures adopted by different
organizations and countries while importing this commodity has created
confusion in the Indian pepper exporters which needs to be negotiated for
standardization of rules in the international forums. |
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