AFP
The trip from India to surplus rarity is a triumph of its agricultural sector
Why doesn’t India even buy a single bushel of American corn?
This is the question that US Secretary of Commerce Howard Lutnick recently raised while criticizing India’s trade policies, hitting its market restrictions.
In another interview, Lutnick accused India of blocking American farmers and urged it to open its agricultural market – suggesting quotas or limits as a possible approach.
Agriculture is a key battlefield in the escalation of US President Donald Trump, the trade war, with tit-for or reciprocal prices that should start on April 2.
Prices are taxes billed on goods imported from other countries.
For years, Washington has put pressure on better access to the agricultural sector in India, considering it as a major unexploited market. But India has fiercely protected it, citing food security, livelihoods and interests of millions of small farmers.
Admittedly, the transformation of India from a nation deficient in food in a food power is one of its greatest successes.
In the 1950s and 1960s, the country relied on food aid to feed its population, but a series of agricultural breakthroughs changed this. India has become self -sufficient in staples and has become the largest milk producer in the world. Rapid growth in horticulture, poultry and aquaculture has widened its food basket.
Today, India does not only feed its 1.4 billion people, but, as an eighth agro-producer exporter of the world, also send grains, fruits and dairy products worldwide.
However, despite these major gains, Indian agriculture is still lagging behind productivity, infrastructure and market access. The global price volatility and climate change add to the challenge. Culture yields are far behind the best world. Small property properties aggravate the problem – Indian farmers work with less than one hectare on average, while their American counterparts had more than 46 hectares in 2020.
No surprise while productivity remains low – agriculture employs almost half of India’s workforce, but represents only 15% of GDP. In comparison, less than 2% of the American population depends on agriculture. With limited manufacturing jobs, more people are stuck in unpaid agricultural work, an unusual trend for a developing country.
This structural imbalance also shapes India’s trade policies. Despite its agricultural surplus, India maintains high prices to protect its farmers from cheap imports. It maintains moderate to high prices – ranging from zero to 150% – on agricultural imports.
The weighted average rate – The average rate of imported products – in India on American agricultural products is 37.7%, against 5.3% on Indian products in the United States, according to the Think Tank Global Research Initiative (GTRI), based in Delhi.
Getty images
Indian farmers cultivate on average hectare, while American farmers had more than 46 hectares in 2020
Bilateral agricultural trade between India and the United States is modest, only $ 8 billion (6.2 billion pounds sterling).
India mainly exports rice, shrimp, honey, vegetable extracts, castor oil and black pepper, while the United States send almonds, nuts, pistachios, apples and lenses.
But while the two countries work on a trade agreement, experts say Washington now wants to push agricultural exports “to big tickets” – wheat, cotton, corn and corn – to reduce its 45 billion dollars trade deficit with India.
“They are not trying to export berries and stuff this time. The game is much larger,” said Biswajit Dhar, a commercial expert from the Delhi -based social development council.
Pushing India to reduce agricultural prices, reduce prices support and open up to genetically modified crops (GM) and dairy products ignore the fundamental asymmetry of global agriculture, according to experts.
The United States, for example, strongly subsidize its agriculture and protect farmers by harvest insurance.
“In some cases”, explains Ajay Srivastava de Gtri, “American subsidies exceed 100% of production costs, creating an uneven playground that could devastate small Indian farmers.”
Agriculture is the backbone of India, supporting more than 700 million people, or almost half of the country’s population.
“The main thing to remember is that agriculture in the two countries is entirely different,” said Abhijit Das, former Center chief for WTO studies at the Indian Foreign Trade Institute.
“The United States has commercial agriculture, while India is based on intensive and subsistence agriculture. It is a question of subsistence of millions of Indians compared to the interests of the American agro-industry.”
But the agricultural challenges of India are not only external. Mr. Dhar says that a large part of the difficulties in the sector is “his own fact”. Agriculture has long been under -funded, receiving less than 6% of the total investment of India – funds for infrastructure, machines and other long -term assets for growth.
AFP
Farmers in India organized events requiring better prices for their cultures
To protect millions of livelihoods, the government protects key crops such as wheat, rice and dairy products with import rights and prices. “But even it doesn’t inspire confidence,” he said.
Four years ago, tens of thousands of farmers organized demonstrations requiring better prices and legal guarantees of the minimum government support price for staples, mainly wheat and rice.
“Even relatively affluent farmers selling surpluses do not see any recovery of soon. And if they feel it, imagine the fate of subsistence farmers,” said Dhar.
Beyond domestic dissatisfaction, commercial negotiations add another layer of complexity.
Mr. Das says that the real challenge for India will be how “to have an agreement with the United States which takes into account the interests of the United States in agriculture while balancing the interests of India in the agricultural sector”.
So what is the way to follow?
“India should not yield to American pressure to open its agricultural sector,” said Srivastava. He warns that this would disrupt millions of livelihoods, threaten food security and flood local markets with cheap imports.
“India must prioritize its national interest and protect its rural economy. Commercial cooperation should not have the detriment of our farmers, our food sovereignty or political autonomy.”
In the long term, experts say that India must modernize its agriculture, make agriculture more remunerative and become more competitive to stimulate exports. Unupom Kausik of Agri -Business OLAM believes that with the main global yields, India could generate a surplus of 200 million metric tonnes of paddy – enough to provide world trade and a combat.
“In a way, Trump holds us a mirror. We did not do much to invest in the production capacity of agriculture,” said Dhar. “For the moment, purchase is the best strategy-perhaps providing the United States with cheaper imports of industrial goods as a compromise.”
But for the best result, he says, India will have to “play Hardball. Basically, said in the United States-we are open to negotiations on other fronts, but do not destabilize our agriculture”.
It is clear that the challenge of India is to negotiate from a position of strength – offering just enough to keep Washington at the table while protecting its rural backbone. After all, in world trade as in agriculture, timing and patience often give the best harvest. The jury is determined to find out if Trump is ready to wait.
