Globalization means the process of making exposure to world countries of any product whether is agricultural or industrial so that it become competitive in the world market. Rules of World Trade Organization (WTO) are to be adopted if one country wants to compete with other countries of the world.
India has been making big strides in the agricultural production so that it can maximise its exports. But the impact of globalization on India’s exports has been amix lot. Our agri-exports face certain uncertainties and certain constraints which arise from our conflicting domestic policies. They are related to production, distribution, food security and pricing concerns. As a result of globalization India has lost its competitiveness in the export market of major agricultural commodities like rice, wheat, edible oils, tea and coffee.
We have increased Minimum Support Prices (MSP) of rice and wheat considerably. It has resulted our export competitiveness in the international market. In the matter of wheat exports till 1990’s we were the marginal export country in the world market, thought we were exporting around 100 million tonnes of wheat every year. Now we export only 3 to 5 millions of wheat annually. As a result of globalization the prices of wheat in the world market has decreased so much that our exports of wheat has become uneconomical.
If we consider the prices of edible oils-mainly groundnut oil and mustard oils-they are twice as high as that in the international market, of most globally traded oils because our cost of production of oil seeds and extraction of oil both are very high. But due to our production of oils shorter than our requirement, we have to import about 4 million tonnes of edible oils annually.
The global low prices of edible oils have benefited us a lot during the last 3 or 4 years since globalisation has got impetus in the world sphere. Recent decline in international production of edible oils does not bode well for India as this would lead to rise in prices of edible oils in the global market and India will have to pay for its imports of edible oils.