New Delhi, April 18: The government is likely to announce incentives to promote farm exports in its foreign trade policy, commerce minister Kamal Nath hinted today.

The annual supplement of the policy for 2007-08 will be unveiled tomorrow. The minister said there was scope to increase agricultural exports to China and this could help to correct the trade deficit.

“The country needs to set up more cold chain warehouses as part of post-harvest facilities to boost agricultural exports,” he added.

The government also expects increased exports to speed up farm sector growth, which has slowed to a meagre 2-3 per cent.

The government is keen to step up the growth rate in the sector as it can generate large-scale employment and income for the rural masses.

The flagship ‘Vishesh Krishi Upaj Yojona’, which provides duty-free credit entitlement, is likely to be extended to cover more products and benefit a larger number of farmers. At present, it covers only fruits, vegetables, flowers, minor forest produce and their value-added products.

The extension of the duty entitlement passbook scheme (DEPB), covering almost 60 per cent of exporters, is also expected to be announced in the policy. The commerce ministry had wanted to replace DEPB with a wider scheme that would be WTO-compliant but could not push it through as the finance ministry did not favour it.

The commerce ministry may grant more benefits to export oriented units to narrow the gap between the concessions given to them and SEZs.

The benefits under the focus market scheme, available to exports to African and Latin American countries, may be extended to the CIS countries. The scheme allows duty credit facility at 2.5 per cent of the free-on-board value of exports of all products to the notified countries. The scrip and the items imported under the scheme are freely transferable.

According to senior officials, the policy is also expected to simplify the procedures for exports and imports to reduce the transaction cost of foreign trade as a result of delays due to cumbersome rules that are now gradually being phased out.

checklist

Vishesh Krishi Upaj Yojona may be extended to cover more products and benefit larger number of farmers
Duty entitlement passbook scheme likely to be extended
More benefits to export oriented units
The benefits under the focus market scheme may be extended to the CIS countries
Procedures for exports and imports may be simplified