World trade and export of potatoes from India*

India's share in world trade is minuscule being 0.6 per cent only in total value of world trade during 1970 to 1998. Agriculture sector has been playing an important role in the exports from India. The value of agri-exports in total exports has come down from 31.7 percent (1970–71) to 15.1 per cent (1999–2000). Still agri-exports fetched Rs. 24576 crores during 1999–2000. Agriculture has been fully brought under the purview of World Trade Organisation (WTO) since January 1995. The Agreement on Agriculture (AoA) focuses on i) market access i.e. tarrification of non-tariff barriers and reduction of tariffs by 36% in 6 years by developed countries and 24% in 10 years by developing countries over 1986–88 base period, ii) agricultural subsidies (Aggregate Measure of Support) not to exceed 10% of total value of agriculture produce for developing countries and 5% of total value of agriculture produce for developed countries, and iii) reduction of export subsidies as per the stipulated levels. As regards India, our AMS is below 10% and export subsidies for agri-exports are non-existent. The bound tariff rates under WTO are 100% for primary products, 150% for processed products and 300% for edible oils. But for certain commodities like potatoes and mushrooms the bound rates are low being 35% and for Soybean 45% and so on. The key determinants for exports are i) export surplus ii) quality production based on phyto-sanitary standards iii) comparative economic advantage iv) infrastructure support and (v) export policy. India has great economic feasibility and technical excellence for exporting potatoes. Technologically Indian potatoes are free from prohibited diseases. India is the third largest potato producing country in the world but our exports have hardly ranged from 0.04 to 0.44 per cent of world potato export during 1986 to 1999. Nominal protection coefficients (NPCs), which are a ratio between domestic price and the world reference price, indicate economic competitiveness. If the NPC is less than one, exports are competitive in world market but some researchers hold that the commodity for which NPC is less than one is ‘exportable’. During 1992 to 2000, the NPCs were below one during 1994, 1995, 1997, 1999 and 2000 and above one for other years except 1996 when data were not available. The policy implications for promotion for potato exports are i) cash compensatory scheme for non-competitive years ii) strengthening of infrastructure iii) understanding of dynamics of trade through global survey of potential markets iv) special emphasis on export of seed potatoes and processed products v) higher bound rates under WTO and vi) a long term export policy. Export oriented marketing research and a sound data base on prices, grade standards, sanitary and phyto-sanitary standards (SPS), consumer preferences, seed standards etc. are the other essential components of an export policy.