Horticulture exports get the season's best

The Foreign Trade Policy unveiled by the commerce ministry includes a new scheme for agriculture called the Vishesh Krishi Upaj Yojana.

The primary aim of the scheme is to boost exports of fruits, vegetables, flowers, minor forest produce and their value-added products. The policy states that the exports of these products shall qualify for duty-free credit entitlement of 5% freight on board (FOB) value of exports.

The announcement is in line with India’s policy since the eighth Five-Year Plan to boost the horticulture sector. Including introduction of various schemes, the government has successively raised spending on the segment. From Rs 25 crore, spending on horticulture has risen to Rs 2,000 crore currently.

This particular investment seems to have paid off. Horticulture’s contribution to overall agricultural GDP has seen a rise from 8% at the start of the eighth Five-Year Plan to 25% presently.

This has also been accompanied by a rise in production and area under horticulture. Take for instance the two major horticulture products — fruits and vegetables

The production of fruits has risen by almost 60% from 1991-92 to 1999-00. In absolute terms, fruit production has risen from 28.6m tonnes (mt) to 45.5mt. The area under fruits has accordingly risen by 7% from 2.9m hectares to 3.1m hectares.

In the case of vegetables, however, there has been virtually no increase in area under production over the period. But production of vegetables has risen by 67% over the period. It stood at 58mt in 1991-92 and rose to 87mt in 1999-00.

Floriculture, which was close to nil before the start of the promotional measures, seems to be taking off as well.

At present, there are 74,00 hectares under floriculture and annual production of loose flowers is estimated at 4.6 lakh tonnes and cut flowers at 11 crore.

However, horticulture exports have been limited, so far forming 4.2% of total agriculture exports in ’02-03. This is a small increase from the 3.6% share during 1992-93.

Considering the positive impact of production enhancing measures on horticulture so far, it seems that the current Foreign Trade Policy may boost the exports of the sector as well.

Source: Economic Times, September 2' 2004