Resist Trump's pressure but reform Indian agriculture

The partnership between the world's two largest democracies has repeatedly stumbled on one issue: agricultural market access.

- PRASANNA KARTHIK

Trump wants India to open its doors to American farm products—from dairy, poultry and maize to apples, almonds and genetically modified crops. India resisted, wary of destabilizing its rural economy. This defiance is economically prudent and socially necessary. But shielding farmers from unfair competition is only half the battle. Without structural reform, Indian agriculture will remain inefficient and fiscally draining, slowing and even strangling our economic transformation.

The US spends billions annually to prop up its agricultural sector through direct payments, crop insurance subsidies and price supports. Its 2018 Farm Bill alone authorized $867 billion over 10 years. These subsidies allow American producers to sell abroad at artificially low prices without fear of market volatility, the same practice that the US accuses China of.

If India allowed unrestricted imports of such products, domestic prices for staples like dairy, poultry and maize might collapse. A 10-15% drop in farm-gate prices could wipe out the livelihood overnight of millions of small farmers—most with less than two hectares of farmland. The ripple effects would hit rural incomes, weaken demand, disrupt rural credit and threaten jobs in sectors that range from logistics and cold storage to food processing and retail.