In order to promote agricultural exports, the Government of India has introduced a comprehensive Agriculture Export Policy (AEP) in 2018. Subsequently the State of Rajasthan has introduced “Rajasthan Agro-processing, Agri-business and Agri-export Promotion Policy, 2019” to harness export potential of Indian agriculture and raise farmers’ income. As an implementation of both the schemes, the Central as well as the State Government have taken several steps at State and District level. The state level monitoring committees (SLMCs), nodal agencies for agricultural exports and cluster level committees have been formed in a number of States and State-specific agri-export action plans have been prepared.

The Govt of India provides assistance through several other schemes to promote exports, including agriculture export viz. Trade Infrastructure for Export Scheme (TIES), Market Access Initiatives (MAI) Scheme, etc. In addition, assistance to the exporters of agricultural products is also available under the export promotion schemes of Marine Products Export Development Authority (MPEDA), Agricultural & Processed Food Products Export Development Authority (APEDA), Tea Board, Coffee Board and the Spices Board of India. While APEDA has identified clusters to promote export, the Ministry of Food Processing Industries has worked out a comprehensive scheme called “one district, one product (ODOP)” and “Mega Food Park (MFP)” scheme to provide modern infrastructure facilities so as to accelerate agri-export from various districts of India.

The Government of Rajasthan in association with the Central government has also introduced a central sector scheme such as transport and marketing assistance for specified agriculture products for providing assistance for the international component of freight, to mitigate the freight disadvantage for the export of agriculture products. The State of Rajasthan has made requisite amendments in APMC Act, market opened-up opportunities for contract farming and new products. A Farmer Connect Portal has been set up for providing a platform for farmers, Farmer-Producer Organizations (FPOs) and cooperatives to interact with exporters. Buyer-seller meets (BSMs) have been organized in the clusters to provide export-market linkages. The State of Rajasthan should also take benefits of the appointment of agricultural counselors by the Central Govt for the first time in the Indian mission abroad to assess & access markets and exploit export opportunities.

Strengthening market linkages

• Develop synergies between various programs and schemes of Centre/State on incubation, entrepreneurs, FPOs, agri-businesses, processors and exporters of agri produce from Rajasthan
• Create an ecosystem to boost export of agricultural commodities under the newly announced Rajasthan Agro-Processing, Agri-Business & Agri-Export Promotion Policy, 2019 completing the national Agricultural Export Policy 2018
• Provide technical services to prospective agri-exporters regarding the regulatory scenario and compliances requirement with respect to export of farm commodities, fresh fruits and vegetables, processed food, spices, seeds and planting material
• Offer short program to develop financial literacy, taxation and compliances with notifications in agri-food export
• Develop linkages of agri-businesses with progressive and smallholder growers, organic producers for producing quality and residue free agri-commodities
• Develop critical trade and business database for prospective agri-food exporters Institute consultancy services to develop DPR for projects, rolling out of traceability and sustainability programs
• Organize sponsored capacity development programs on agri-food export from Rajasthan.

Furthermore, the government of Rajasthan can help to make market linkages more effective and efficient to improve farmers’ income and the agriculture sector to grow.

• The importance of market linkages: Market linkages are essential for the growth of the agriculture sector in Rajasthan. Same provides farmers with access to a wider market, which allows them to get a better price for their produce. Market linkages also help farmers to access inputs and services, which can improve their productivity.
• The role of the government: The government of Rajasthan plays an important role in promoting market linkages in the agriculture sector by providing financial assistance to farmers and agri-businesses, develop infrastructure for market linkages, and create awareness about the benefits of market linkages.
• The value chain system and market linkages: The future of market linkages in the agriculture sector depends heavily on the States’ capacity to build up supply and value chain systems by promoting market linkages, and the growing demand for agricultural products, which can help to transform the agriculture sector in Rajasthan.

Key challenges in investment and financing of agriculture sector

Agriculture production and associated rural economic activities are subject to seasonality and gestation periods of farming activities such as agri-production, farm input supply, agri- processing and supply chain management. The kisan credit card (KCC) is a typical banking and investment model which is built on recovery of investment only twice in a year due to seasonality and gestation periods that often last from a few months for seasonal crops and livestock. As a result, there is slow cash flow and thus a slow rotation of the invested capital for agriculture and rural entrepreneurs. Another example is the large investment in capital assets such as farm equipment which require larger capital outlays, and repayment spanned over several years. Rural and commercial banks engaged in priority lending find it difficult to deal with longer loan maturities and irregular repayment schedules which are risky and present additional challenges to liquidity management. The investment in agriculture and allied sectors is viewed not only as risky but also slower rotation of capital results in a lower profitability compared to other sectors. External factors such as the weather, major pest and disease outbreaks or prices of inputs and outputs, also plays a major role in the capacity of rural borrowers to honor financial commitment on installment and repayment which are largely beyond their control. In nutshell, the key challenges being faced by banks in financing agriculture in Rajasthan and other part of India include;

• Low credit absorption: The credit absorption capacity of farmers in Rajasthan is low. This is due to a number of factors, such as the small size of landholdings, the low level of education among farmers, and the lack of collateral.
• High risk: The risk associated with agricultural lending is high. This is due to the fact that agricultural production is dependent on factors such as weather, pests, and diseases.
• High transaction costs: The transaction costs associated with agricultural lending are high. This is due to the fact that farmers are often located in remote areas, and the documentation requirements for agricultural loans are complex.
• Lack of awareness: There is a lack of awareness among farmers about the benefits of bank loans. This is due to the fact that many farmers are illiterate, and they do not have access to information about bank loans.

Policy initiatives to boost agriculture growth

The Rajasthan agri export policy 2019 endeavors to make Rajasthan as a production supply hub of State specific crops, processed agri-products and a destination of choice for investors, processors and exporters. The policy aims at supporting new agro processing and agro business enterprises set up in the state and also to existing agro processing and agro business enterprises undergoing modernization, expansion and diversification. A wide range of agri-sector has been covered under the new policy including fruit and vegetable processing, spices processing, cereals and other consumer products, oilseed products, rice and flour milling, pulses processing, herbal, medicinal, flower and aromatic products, milk and honey processing to name a few. Other notable policy initiatives to boost agriculture sector in the State of Rajasthan include;

• PM Formalization of Micro Food Processing Enterprises Scheme (PM FME Scheme) in partnership with the State of Rajasthan has launched for providing financial, technical and business support for up gradation of existing micro food processing enterprises and support to farmer producer organizations (FPOs), self help groups (SHGs), producers’ cooperatives for capital investment, common infrastructure and support branding and marketing.
https://pmfme.mofpi.gov.in/af47e3a3-0941-4410-80a8-c4d2ff5f6bc5


• One District One Product (ODOP) scheme approaches to reap the benefit of scale in terms of procurement of inputs, availing common services and marketing of products specific to each district of Rajasthan. In addition, ODOP for the scheme will provide the framework for value chain development and alignment of support infrastructure in cluster mode on priority crops in each district.
https://mofpi.gov.in/pmfme/one-district-one-product


• Rajasthan Agro-processing, Agri-business & Agri-export Promotion Policy, 2019 aims to promote the export of agricultural products from Rajasthan. The policy provides for a number of incentives, including financial assistance, marketing support, and infrastructure development.
https://istart.rajasthan.gov.in/public/Policies/Rajasthan-Agri-Business-Policy-2019.pdf


• Rajasthan State Agricultural Marketing Board (RSAMB) is responsible for regulating the agricultural markets in Rajasthan. The RSAMB also provides export assistance to farmers and agri-businesses and ensures that farmers get a fair price for their produce and that consumers have access to quality agricultural products.
• State Agricultural Universities (SAUs) including Agriculture University, Jodhpur; Agriculture University, Kota; SKN Agriculture University Jobner; Maharana Pratap University of Agriculture and Technology, Udaipur; Swami Kesavanand Rajasthan Agricultural University Bikaner; Rajasthan University of Veterinary and Animal Sciences, Bikaner to conduct agricultural research and providing agricultural education in Rajasthan. SAUs are to develop new agricultural technologies, train farmers on new agricultural practices, and provide information about agricultural markets.
• ICAR institutions including CAZRI, Jodhpur; CIAH, Bikaner; DRMR Bharatpur; Central Sheep and Wool Research Institute (CSWRI) Avikanagar is to carry out cutting edge research and develop technologies suitable to agro climatic regions of Rajasthan.
• Other initiatives related to agriculture are Rajasthan State Agro Industries Development Board (RSAIDB); Rajasthan Kisan Aayog (RKA); Rajasthan State Seed and Organic Certification Agency (RSSOCA); Rajasthan State Warehousing Corporation (RSWC); State Institute of Agriculture Marketing (SIAM) and International Horticulture Innovation and Training Centre (IHITC).

In addition, the government of Rajasthan has taken several policy initiatives in the agriculture sector in recent years such as announcing a separate agri budget for the State every year during the annual budget of the State. These agriculture initiatives have been aimed at improving the productivity and profitability of farmers, increasing the availability of food, and promoting sustainable agriculture. The State of Rajasthan must prioritize its investment in following areas to accelerate agriculture gains and improve processing and agri export from the State.

• Promoting crop diversification: The government of Rajasthan is gearing to promote crop diversification in high value crops, fruit orchards and agro-forestry and promote organic and IPM cultivation by providing financial assistance to the farmers, providing information about new crops, and developing markets for new crops.
• Improving irrigation facilities: The government of Rajasthan should improve irrigation facilities by building dams, canals, and wells and promote micro irrigation facilities; soil and water conservation and promote rainwater harvesting, and more importantly photovoltaic agriculture.
• Increasing use of biofertilizers and biopesticides: The government of Rajasthan is promoting the use of biofertilizers and biopesticides by providing incentive to farmers, providing information about the use of biofertilizers and biopesticides, and regulating the quality of biofertilizers and biopesticides in order to increase adoption and uptake of organic and IPM cultivation.
• Investing in research and development: With five operational State Agricultural Universities and numerous ICAR institutions, the government of Rajasthan should prioritize research, invest in scalable technologies, adopt new technologies, provide funding for research, and promote collaboration between the government, the private sector, and academic institutions.
• Improving agricultural extension services: Rajasthan government is improving agricultural extension services by technological due diligence, promoting technology transfer and increasing the number of scientific staff and extension workers, providing training, and making access to technology and extension services more accessible to farmers.
• Promoting food processing: The government of Rajasthan should promote food processing by providing financial assistance to food processing industries, developing infrastructure for food processing, and promoting the export of processed food products.
• Creating market linkages and value chain development: The government of Rajasthan can create market linkages by developing agricultural markets, providing information about market opportunities, and promoting the export of agricultural products.

The future of agri-processing and agri export in Rajasthan is bright. The government is committed to promoting the sector, and the growing demand for agricultural products in international markets are creating new opportunities. There is a tremendous market opportunity for crops grown in Rajasthan such as mustard, guar, isabgol, bajra, oilseeds, pulses, fruits, vegetables, spices, milk, wool, spices, aromatic and medicinal plants. With the right support, agri export from Rajasthan can grow significantly in the coming years.