ROLE OF AGRICULTURAL EXPORT IN INDIAN ECONOMY

Dr.V.R.Palanivelu Mrs.S.Nandhini
Professor- cum-Director Ph.D Research scholar
PRIMS, Periyar University PRIMS, Periyar University

ABSTRACT

Agriculture is the backbone of India’s socioeconomic development. In India,

agriculture accounts for about 12% of total exports earnings which imply that uncertainty in
the world agriculture market will have a great impact on the whole economy. Indian
agricultural export has undergone significant changes during recent times. In this context the
present study has analyzed the trends in export of agricultural commodities over years from
India and the export performance of a large number commodity and commodity group based
on their contributions to the total agricultural export. Also the study finds a significant
increase and as well as decrease in share of export of certain agricultural commodities.

Keywords:

Agriculture, Indian economy, export, Trends, Export Performance

INTRODUCTION

Economists, world organizations and scientist believe that agricultural export is a

catalyst for growth, especially in developing countries where it is the main source of foreign
earnings and national incomes (Verter and Bečvářová, 2014; Verter, 2015).Rising world
demand for Indian agricultural commodities present great opportunities. Agriculture sector of
India is the backbone of the economy. Though, with the development of other sectors, the
share of agriculture in GDP of the country has reduced. But still, Agriculture sector continues
to plays a leading part in supporting the whole economic situation of India. Agricultural
exports of India have increased manifolds. However, the contribution of agricultural exports
in the total export of the country has declined. India exports surplus of food and agricultural
products. A large portion of India’s export trade is based on the agricultural products, such as
jute, tea, tobacco, coffee and spices. However, in current year, rice, marine products and
spices etc. are playing major role in agriculture export share. India’s agriculture exports can
be divided into three broad categories, i.e. export of a) raw products, b) semi raw products c)
processed and ready-to-eat products. Raw products exported are essentially of low value high
volume nature, while semi processed products are of intermediate value and limited volume
and processed ready-to-eat products are of high value but low volume nature.

Role of agriculture in Indian economy

Agriculture plays an important role in Indian economy. Indian agriculture sector

accounts for 18 per cent of India's gross domestic product (GDP) and provides employment
to 50% of the countries workforce. India is the world's largest producer of pulses, rice, wheat,
spices and spice products. More number of people in India are supported by Agriculture. 75%
of India’s population depends on Agriculture or Agro-industries now the growth is lagging
on. The agricultural products which contribute in increase in Indian economy are crops, milk,
animal husbandry, forestry. Major products that are exported from India includes cereals,
vegetable, fruits, oils, meals, and spices. Agriculture exports also contribute to national
income, foreign exchange and employment. The department of export agriculture is
responsible for research and development by means of productivity production and quality
improvement.

REVIEW OF LITERATURE

Prakash et al (1995) examine the impact of new economic policy on agricultural exports.
They look at the current trends in foreign trade of India, contribution of agricultural exports
in total exports, the share of India in the global production and export of agricultural
commodities, the changing compositions of major exportable commodities over time, major
steps of liberalization in agricultural export import policy, to identify the newly emerging
agricultural commodities having vast potential for steady exports and to suggest a strategy for
realizing full export potential of agricultural commodities.

Burange L. G. & Sheetal J. Chaddha (2008) evaluate the structure of comparative

advantage in India and the change in the scene over a 10-year period from 1996 to 2005.
India enjoys a comparative advantage in the exports of goods for which standard technology
is required for the production is shifting to developing economies like India as shown by
absence of Revealed Comparative Advantage in imports of these goods

Jha Brajesh (2002) has examined the export competitiveness of Indian Tobacco and also
discussed the share of agriculture and non-agriculture export in total exports of India.
Neha Sinha (2013) has discussed the India’s policy on export of agricultural products and
exports of allied products has often been restrictive and also examined inadequate
warehousing infrastruture

Dr. C Paramasivan, R Pasupathi (2017) has analyzed the status of agro based food
products and its export performance over years by India and also discussed the performance
of Agro based industries in India.

OBJECTIVES OF THIS STUDY

1. To examine the growth, performance and future prospects of agricultural exports.

2. To analyze the role of agricultural exports in Indian economy.
3. To find the difference in percentage export of agricultural commodities for three
years.
4. To analyze the trend to forecast the agricultural products for next two years.

STATEMENT OF THE PROBLEM

India’s policy on export of agricultural products and allied products has often been
restrictive. Trade barrier hinders the export of agricultural products. Inadequate
warehousing infrastructure is the main problem faced by Indian farmers who are ready to
export their agricultural products and also the maintenance of the warehouse is also
restraining.The increase in employment opportunities in other manufacturing sector for
skilled and unskilled workers which decrease the employment opportunities in agricultural
sector. The government should take initiative to develop Agro Input Manufacturing Unit
which produce goods either for mechanization of agriculture or for increasing productivity
and seed industries which will increase the agricultural growth and provides the way for
exports that will increase our Indian economy

RESEARCH METHODOLOGY
The Research methodology is used to systematically solve the research problems. It may be
understood as a science of studying how research is done scientifically. In this way we study
various steps that are generally adopted by the researcher in studying his/her research
problem along with the logic behind them. It is necessary for the researcher to know not only
research but also the methodology. In this study simple percentage is calculated to find the
difference in percentage export of agricultural products in three years and trend analysis is
used to forecast the export of agricultural products in next two years.

THREE YEAR EXPORT STATEMENT OF PRINCIPAL PRODUCTS

EXPORT STATEMENT FOR 2015-2016

TABLE NO 1. FLORICULTURE

S.No Product Value Percentage

1. Fruits/Vegetable 48503 50

2. Floriculture 47776 50

INTREPRETATION

In the year 2015-2016 the exports of fruits/vegetable is 50% and floricultural export is 50%.

TABLE NO 2. FRESH FRUITS AND VEGETABLES

S.No Product Value Percentage

1. Fresh Vegetables 476262 55

2. Fresh Fruits 391841 45

INTREPRETATION

In the year 2015-2016 the exports of fresh vegetables is 55% and fresh fruits export is 45%.

TABLE NO 3.PROOCESSED FRUITS AND VEGETABLES

 S.No Product Value Percentage

1. Pulses 165544 23

2. Processed Vegetables 169638 24

3. Processed Fruits & Juices 376057 53

INTREPRETATION

In the year 2015-2016 the exports of pulses is 23%,processed vegetable is 24% and fresh
fruits export is 53%.

TABLE NO 4.ANIMAL PRODUCTS

S.No Product Value Percentage

1. Sheep/Goat Meat 83776 3

2. Other Meat 0.37 0

3. Dairy Products 168151 6

4. Processed Meat 619 0

5. Buffalo Meat 2668155 89

6. Animal Casings 1702 0

7. Poultry Product 76671 2

INTREPRETATION

In the year 2015-2016 the exports of sheep/goat meatis 3%,exports of dairy products is
6%,exports of buffalo meat is 89% and exports of poultry product is 2%.

TABLE NO 5.OTHER PROCESSED FOOD

 S.No Product Value Percentage

1. Guargum 361297 20

2. Groundnut 403939 22

3. Cereal Prepartion 331224 18

4. Milled Products 107538 6

5. Alcoholic Beverages 202719 11

6. Misc Processed Items 289779 16

7. Cocoa Product 126037 7

INTREPRETATION

In the year 2015-2016exports of the guargum is 20%,exports of groundnut is 22%,exports of

cereal preparation is 18%,exports of milled products is 6%,exports of Alcoholic products is
6%,exports of Misc processed items is 16% and exports of Cocoa products is 7%.

TABLE NO 6.CEREALS

S.No PRODUCT VALUE PERCENTAGE

1. BASMATI RICE 2271437 57

2. WHEAT 97233 2

3. OTHER CEREALS 158892 4

4. NON BASMATI RICE 1508594 37

INTREPRETATION

In the year 2015-2016exports ofthe Basmati rice is 57%,exports of Wheat is 2%,exports of

Fruits/Vegetables is 49%,exports of Floriculture is 51%,exports of other cereals is
4%,exports of Non Basmati rice is 37%

EXPORT STATEMENT FOR 2016-2017

 TABLE NO 7.FLORICULTURE

S.No Product Value Percentage

1. FRUITS/VEGETABLE 52775 49

2. FLORICULTURE 54478 51

INTREPRETATION

In the year 2016-2017 theexports of Fruits/ vegetables is 49% and exports of floriculture is
51%

TABLE NO 8.FRESH FRUITS AND VEGETABLES

S.No PRODUCT VALUE PERCENTAGE

1. FRESH VEGETABLES 571869 54

2. FRESH FRUITS 496692 46

INTREPRETATION

In the year 2016-2017 theexports of Fresh vegetables is 54% andexports of fresh fruits is
46%

TABLE NO 9. PROCESSED FRUITS AND VEGETABLE

 S.NO PRODUCT VALUE PERCENTAGE

1. PULSES 128163 19

2. PROCESSED VEGETABLES 177382 25

PROCESSED FRUITS &

3. 390518 56
JUICES

INTREPRETATION

In the year 2016-2017 the exports of pulses is 19%,exports of processed vegetables is 25%
and exports of processed fruits & vegetables is 56%

TABLE NO 10. ANIMAL PRODUCTS

S.No PRODUCT VALUE PERCENTAGE

1. SHEEP/GOAT MEAT 87586 3

2. OTHER MEAT 9191 0

3. DAIRY PRODUCTS 171164 6

4. PROCESSED MEAT 458 0

5. BUFFALO MEAT 2630316 89

6. ANIMAL CASINGS 1384 0

7. POULTRY PRODUCT 53030 2

INTREPRETATION

In the year 2015-2016 the exports of sheep/goat meat is 3%,exports of dairy products is
6%,exports of buffalo meat is 89% and exports of poultry product is 2%

TABLE NO 11. OTHER PROCESSED FOOD

 S.No PRODUCT VALUE PERCENTAGE

1. GUARGUM 313174 16

2. GROUNDNUT 545432 28

3. CEREAL PREPARTION 357160 18

4. MILLED PRODUCTS 80385 4

5. ALCOHOLIC BEVERAGES 201369 10

6. MISC PROCESSED ITEMS 307018 16

7. COCOA PRODUCT 108999 6

INTREPRETATION

In the year 2015-2016 theexports ofguargum is 16%,exports of groundnut is

28%,exports of cereal preparation is 18%,exports of milled products is 4%,exports of
Alcoholic products is 10%,exports of Misc processed items is 16% and exports of Cocoa
products is 6%

TABLE NO 12. CEREALS

S.NO PRODUCT VALUE PERCENTAGE

1. BASMATI RICE 2160513 54

2 WHEAT 44429 1

3. OTHER CEREALS 142419 3

4. NON BASMATI RICE 1712165 42

INTREPRETATION

In the year 2015-2016 theexports of Basmati rice is 54%,exports of Wheat is 1%,exports of

other cereals is 3%,exports of Non Basmati rice is 42%

EXPORT STATEMENT FOR 2017-2018

 TABLE NO 13. FLORICULTURE

S.NO PRODUCT VALUE PERCENTAGE

1. FRUITS/VEGETABLE 66525 57

2. FLORICULTURE 50726 43

INTREPRETATION

In the year 2017-2018 theexports of Fruits/vegetables is 57% and exports of Floriculture is

43%

TABLE NO 14. FRESH FRUITS AND VEGETABLES

S.NO PRODUCT VALUE PERCENTAGE

1. FRESH VEGETABLES 499749 51

2. FRESH FRUITS 474630 49

INTREPRETATION

In the year 2017-2018 the exports of Fruits/vegetables is 51% and exports of Fresh Fruits is
49%

TABLE NO 15.PROCESSED FRUITS AND VEGETABLES

S.NO PRODUCT VALUE PERCENTAGE

1. PULSES 146751 20

2. PROCESSED VEGETABLES 182324 24

PROCESSED FRUITS &

3. 416477 56
JUICES

INTREPRETATION

In the year 2017-2018 the exports of pulses is 20%,exports of processed vegetables is 24%
andexports of processed fruits&juices is 56%

TABLE NO 16.ANIMAL PRODUCTS

 S.NO PRODUCT VALUE PERCENTAGE

1. SHEEP/GOAT MEAT 86396 3

2. OTHER MEAT 1644 0

3. DAIRY PRODUCTS 195433 7

4. PROCESSED MEAT 991 0

5. BUFFALO MEAT 2598845 87

6. ANIMAL CASINGS 32744 1

7. POULTRY PRODUCT 55185 2

INTREPRETATION

In the year 2017-2018 the exports of sheep/goat meat is 3%, exports of dairy products is
7%,exports of buffalo meat is 87% ,exports of Animal casings is 1%andexports of poultry
product is 2%

TABLE NO 17.OTHER PROCESSED FOOD

S.NO PRODUCT VALUE PERCENTAGE

1. GUARGUM 416956 22

2. GROUNDNUT 338442 18

3. CEREAL PREPARTION 355836 19

4. MILLED PRODUCTS 87411 5

5. ALCOHOLIC BEVERAGES 210696 11

6. MISC PROCESSED ITEMS 370182 20

7. COCOA PRODUCT 114340 5

INTREPRETATION

In the year 2017-2018 the exports of guargum is 22%,exports of groundnut is 18%,exports of

cereal preparation is 19%,exports of milled products is 5%,exports of Alcoholic products is
11%,exports of Misc processed items is 20% andexports of Cocoa products is 5%
 TABLE NO 18.CEREALS

S.NO PRODUCT VALUE PERCENTAGE

1. BASMATI RICE 2684119 52

2. WHEAT 43174 1

3. OTHER CEREALS 159639 3

4. NON BASMATI RICE 2292706 44

INTREPRETATION

In the year 2017-2018 theexports of Basmati rice is 52%,exports of Wheat is 1%,exports of

other cereals is 3%,exports of Non Basmati rice is 44%.

TREND ANALYSIS

Trend analysis is the widespread practise of collecting information and attempting to spot a
pattern. In this study, trend analysis is used to forecast the export of agricultural products in
next two years.

14000000

12000000

10000000

8000000
MONTH
6000000 ACTUAL EXPORT
ESTIMATED EXPORT
4000000

2000000

0
1 2 3 4 5
INTERPRETATION

From the above trend analysis the actual export values in the year 2015-16 is10533382.97
and the export vaue in the year 2016-17 is 10788968.97 and the export value in the year
2017-18 is 11881927. The estimated export sales in the year 2019-20 is 11079288.41 and
export sales in the year 2020-2022 is 11084775.92. It is observed that estimated export sales
decline for future years.

LIMITATION OF THE STUDY

1. The study uses the data from various online resources which is more restrictive.
2. The precise detail about agricultural export in Indian economy is not found.
3. Among total agricultural products exported in the year 2017-18 only particular
products export values are found.

FINDINGS AND SUGESSTIONS

1. Government should create awareness among budding entrepreneurs in field of

agricultural exports.
2. Government should take initiate to provide better remuneration to agricultural farmers
3. Funding agencies should come forward to assist agricultural exporters.
4. Government should exempt the sales tax on agricultural product which will thereby
increase the export sales.
5. Younger generation should come forward to work on growth agriculture export.
6. the share of agricultural export to the total export is very less in current year. In this
context everyone should come forward to take initiative in growth of agriculture
which is backbone of our country and also a boom for Indian economy for forth
coming years.

CONCLUSION

To achieve progressively higher rates of agriculture exports, proper measures should

to take to set-up agriculture productivity. Farmer should aware of modern farming technology
and make use of technologically advanced equipment and lots of energy subsidies in the form
of irrigation water, fertilizer and pesticides. The agriculture export increase only when
younger generation takes initiative, young minds are always creative. Both the government
and corporate sector must increase the number of scholarship for agriculture students to
enhance research and development.