Indian farmers fear paying the price for the India-US trade deal
The US announced tariff reductions and greater purchases of US goods by India, while the latter said that it will continue to protect several products. India’s opposition and farmers' associations fear that US imports could make life harder for small farmers, already burdened by debt and price volatility.
New Delhi (AsiaNews) – India and the United States signed a trade agreement earlier this week, but it is still unclear whether and how it will be implemented.
US President Donald Trump announced his intention to reduce import tariffs on Indian goods from 25 per cent to 18 per cent in exchange for India halting purchases of Russian oil and committing to purchase US$ 500 billion worth of US products, including agricultural goods.
Prime Minister Narendra Modi said he was "delighted" with the agreement, but the opposition slammed it.
Several political leaders fear that imports of cheap corn, cotton, and soybeans from the United States could have devastating consequences for Indian farmers and producers, who in 2020-21 began a campaign of protests against the Modi government, a sign of how rural discontent can affect political stability.
Indian National Congress (INC) leader Rahul Gandhi said that Modi “sold out" Indian farmers.
Former Rajya Sabha MP Jawhar Sircar, questioned the feasibility of the agreement. “Our budget expenditure for 2026-27 is Rs. 53.5 lakh crore (Rs. 5.35 trillion, US$ 630 billion) in total – all put together,” he said. “Does it mean India has committed about 85 per cent of its total budget only on goods from America? Or some 30 per cent of our annual budget for the next three years to import American merchandise”.
On Tuesday, Commerce and Industry Minister Piyush Goyal stated that the agreement will exclude sensitive agricultural and dairy products, adding that the details of the agreement will be made public "soon”.
In recent years, India has maintained protectionist barriers, arguing that agricultural products in developing countries cannot be treated as tradable commodities.
Dairy products, for example, are subject to restrictions due to cultural and religious concerns about US livestock feeding practices, and there are serious issues with introducing genetically modified crops.
“Have we surrendered our age-old opposition to Genetically Modified crops that harm our farmers? Are we surrendering to the US GM,” Sircar asked.
In India, agriculture employs between 45 and 55 per cent of the country’s workforce, yet contributes only about 18-19 per cent of the country's value added, and relies heavily on internal migration. Over 85 per cent of Indian farmers depend on small plots of land and unpaid family labour.
Unlike American industrial agriculture, Indian agriculture evokes a lifestyle in which cows and oxen are revered as symbols of cultural continuity, not simply economic units.
The sector has always been very fragile, so much so that for small farmers, even a modest drop in prices can determine whether a daughter or son goes to school or whether a loan is renewed.
The dairy sector, in particular, is based on family units where one or two heads of cattle provide a steady income for everyday expenses.
US agriculture, by contrast, is industrial, export-oriented, and heavily subsidised.
The recent federal budget for 2026-27 seeks to address some of these pressures, but farmers say it is not enough.
Finance Minister Nirmala Sitharaman recently proposed an allocation of Rs 1.30 lakh crore (Rs 1.3 trillion or US$ 14.5 billion) for the Ministry of Agriculture and Farmers Welfare, a modest increase of 2.6 per cent over the previous year's estimate of Rs 1.27 lakh crore.
Financial support to farmers through the Kisan Samman Nidhi programme remained unchanged at Rs 63,500 crore (about US$ 7 billion), with no increase. Funding for agricultural research was reduced by 4.8 per cent, falling to Rs 9,967.40 crore (about US$ 1.1 billion).
The government also allocated 150 crore (about US$ 17 million) to Bharat-VISTAAR, a multilingual artificial intelligence tool created specifically for farmers, and 350 crore (about US$ 39 million) to support high-value crops such as coconut, cashew, and sandalwood.
The fertiliser subsidy sector received 1.70 lakh crore (almost US$ 19 billion), up 8.5 per cent.
The budget was also met with criticism from several agricultural organisations. The Indian Farmers' Union (Bharatiya Kisan Sangh) claimed that the government had not kept its promises to farmers since there was no legally guaranteed minimum price, no intervention on agricultural debt, and no specific support for cotton growers in states like Punjab, where cultivated acreage has plummeted.
Sukhpal Singh, chairman of the Punjab State Farmers & Farm Workers Commission, lamented the lack of a package for his state, despite its deteriorating water resources. Noting that cotton growers across the country are struggling, he said they had expected measures to save cotton, given that farmers are killing themselves in eight of the nine cotton-producing states.
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24/10/2018 13:57
