Model Question and Answers for APSC | Indian agriculture exports are more a cause of problems than a reason for celebration. Discuss.

Ans: The uncertainties in the global economic environment, significantly driven by Russia’s invasion of Ukraine and the resultant sanctions on Russia by the West, along with Sri Lanka’s ongoing struggles to stay afloat amidst a deepening crisis, have all been believed to have created export opportunities for countries such as India.

However, this well-celebrated export spike needs to be viewed with a pinch of salt.

Emissions-embodied exports:

1. The 2009 United Nations Climate Change Conference in Copenhagen witnessed a vociferous argument from countries such as India and China that developed countries who are consuming polluted goods produced elsewhere also have an obligation to clean up the mess.
2. The data available from the Organisation for Economic Co-operation and Development(OECD) indicates that India is one of the leading exporters of carbon emissions-embodied products and that there is a steady increase in the total carbon emissions embodied in exports.
3. China is the largest exporter of carbon emissions-embodied products, followed by the S., Russia and India.
4. The striking difference between China and India is that while China’s net exports began to decline from 2007-08, net exports in India started to steadily increase in that period.

Relocating pollution to the third world: Pollution haven hypothesis

1. Most developed countries are the net importers of polluted goods produced elsewhere, especially in the developing The largest net importers of carbon emission-intensive goods are the U.S., Japan and Germany.
2. Due to the stringent environmental measures adopted by developed countries, pollution-intensive industries show a tendency to relocate from developed countries to developing countries with the lowest environmental standards/weak enforcement of environmental standards in order to cut resource and labour costs — a phenomenon researchers term as ‘pollution haven hypothesis.
3. Thus, developing countries that are lax in enforcing environmental policies eventually become pollution havens.

The environmental Kuznets curve:

• One could possibly argue that an increased GDP as a result of expansion in export revenue can be utilised for improving environmental quality.

1. As per the environmental Kuznets curve, there is an inverted U- shape relationship between the income of a country and its environmental degradation.
2. This implies that as income increases, environmental quality begins to deteriorate, but improves after some time. However, there is no consensus across studies with respect to this possibility.

India is exporting water:

• Coming to the exports of agricultural and food products, India is virtually exporting some of its depleting natural resources such as water through exports.
• India is the leading exporter of rice in the world market. Given that rice is a water-intensive crop, India is indirectly exporting water to other countries.
• This virtual water trade will have an adverse impact on the long- term sustainability and food security of the country although there has been an overall improvement in water-use efficiency.

The way forward:

• The growing consumption in rich countries has come at a cost for developing countries such as India. Countries have begun imposing an environmental tax to address a broad spectrum of environmental For example, in OECD countries, the tax roughly constitutes 2% of the GDP.
• While the environmental tax in India is around 1%, the tax as a percentage of GDP has marginally come down from 1.38% in 2005 to 07% in 2019.
• In order to ensure long-term sustainability, strict environmental measures need to be explored, such as revisiting the possibilities of increasing the environmental tax, even though the short-run implications, especially on the trade front, may not be pleasant.
• Similarly, water-saving policies that seek to improve the water use efficiency are also the need of the hour, in order to promote sustainable production of rice and also safeguard food security in the country.