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Exports and Sustainability
Context:
As global environmental concerns continue to rise, integrating sustainability into export strategies has become crucial for countries worldwide.
Exports refer to goods and services produced in one country and sold to another, playing a crucial role in international trade by driving economic growth and creating jobs across borders. As global markets evolve, the need for sustainable practices in export strategies is paramount, not only for environmental protection but also for enhancing economic performance.
Defining True Sustainability in Agricultural Commodities:
- Sustainability isn’t only about economic sustainability driven by productivity.
- It depends on three key pillars: Ecological (Environmental impact and resource management), Economic (Productivity and financial viability), and Social (Labour rights, welfare, and community well-being).
- A sustainable agricultural commodity system requires robust governance and policies across these pillars.
- Sustainability should be applied to the entire lifecycle of a commodity: pre-sowing, on-farm production, and post-harvest stages.
Overview of India’s Agricultural Export Growth:
- India, one of the world’s largest agricultural product exporters, has seen its agricultural export value soar to $53.1 billion in 2022-2023, up from $8.7 billion in 2004-2005, a six-fold increase in less than two decades.
- Exports are crucial for strengthening India’s economy, contributing to revenue, foreign exchange, and offering transactional options.
- However, this rapid growth poses challenges to the sustainability of the production, processing, and distribution systems.
Sustainability Challenges:
- Ecological Impact: The tea and sugar industries, which are major export commodities, face ecological challenges such as the management of human-wildlife interactions, chemical use, and labour concerns.
- For instance, 70% of tea plantations are located at the periphery of forests, leading to frequent human-wildlife conflicts.
- Chemical Use: Synthetic pesticides constitute up to 85% of total pesticide use in tea plantations, increasing chemical residues in the final product and posing health risks.
- Conversion of natural ecosystems: Grasslands and savannahs, especially in Karnataka and Maharashtra, are being converted into sugarcane fields, leading to biodiversity loss and exacerbating water scarcity.
- Labour Concerns: More than half of tea plantation workers are women, often underpaid and working in hazardous conditions without proper protective gear.
Key Drivers of Sustainable Exports:
- Voluntary Sustainability Standards (VSS): VSS play a significant role in promoting green exports, particularly in developing countries. These standards ensure that products meet specific sustainability criteria.
- Approximately 500 VSS schemes exist globally, covering key exports like coffee, cocoa, and organic foods.
- Corporate Social Responsibility (CSR): Firms that actively engage in CSR practices tend to experience higher export intensity. Innovative activities and investments in research and development are critical for small and medium-sized enterprises (SMEs) to access foreign markets.
- Regulatory Frameworks: Reforms in subsidy rules at the World Trade Organisation (WTO) are being proposed to align trade practices with sustainable development goals.
Benefits of Sustainable Exports:
- Economic Growth: Sustainable exports can boost a country’s economy by creating new markets and increasing competitiveness. Eco-friendly products often command higher prices and can lead to increased market share.
- Environmental Protection: Adopting sustainable practices reduces the environmental impact of production and transportation. This includes minimising waste, reducing carbon emissions, and conserving natural resources.
- Social Responsibility: Sustainability in exports reflects a commitment to ethical practices, improving the social well-being of communities involved in production. This can enhance a country’s reputation and foster stronger relationships with trading partners.
Future Directions:
- Millets as a Sustainable Alternative: The rise of millets as a sustainable commodity offers lessons for promoting both economic growth and environmental resilience.
- Strengthen Policies and Incentives: Governments should implement policies that encourage sustainable practices and provide incentives for businesses to adopt green technologies.
- Enhance International Cooperation: Collaborative efforts to establish global standards and share best practices can facilitate the transition to sustainable exports.
