Opinion Dear Donald Trump, hear out Indian farmers

Therein lies the difference between the challenges Prime Minister Narendra Modi and US President Donald Trump face. Opening up Indian markets to American agricultural and dairy products has emerged as a key sticking point in the tariff negotiations. The democratic pressures on the two governments differ vastly. Farm subsidies, mechanisation, and large farm sizes enable the US to produce affordable wheat, soybeans, and other crops. Indian farmers struggle in a low-productivity world where they barely manage to subsist. Whereas agricultural workers form less than two per cent of American workers, in India, they are 45 per cent. While agriculture is an increasingly smaller portion of Indian GDP — only about 17 per cent by World Bank estimates — the proportion of workers in agriculture has barely declined. Thus, anything that affects agricultural incomes affects a far greater proportion of the population in India than in the US.

India needs to enhance its agricultural productivity and compete effectively in the global market. It needs to generate more jobs in the manufacturing and service industries to reduce crowding in agriculture. However, these are complex challenges without instant solutions, and they are not addressable within the kind of tariff deadlines that seem to be offered. With 65 per cent of the population living in rural areas, farm distress is a genuine concern to both the populace and politicians. It is not surprising that protecting Indian agriculture is the red line around which all Indian political parties have united, whether they belong to the ruling party or the Opposition.

When it comes to dairy, the challenge is even thornier. India produces about a fourth of the dairy products in the world. Almost all of it is consumed locally with little import or export. Unlike the corporatisation of dairy production in the US, India’s milk production primarily comes from households that own two or three milk-producing cows or water buffaloes. Women are largely responsible for animal care and milking. Families use the milk for home consumption, but they also sell it when there is excess production. Milk cooperatives such as Amul and Mother Dairy dominate the market. They purchase, pool, and process milk via village-level cooperatives from rural women. According to some estimates, the dairy sector comprises nearly 80 million dairy farmers.

It is the salience of agriculture and dairy farming to the lives of hundreds of millions of Indians that makes it difficult to imagine a scenario in which global trade pressures and corporate profits trump the livelihoods of rural families. Gujarat is the birthplace of cooperative dairying, where the profits of Amul are distributed to more than three million members. In 2019, when there was a possibility of including the dairy sector in a regional trade agreement, the Prime Minister’s mailbox was flooded by thousands of handwritten postcards from women in Gujarat, arguably leading to India’s withdrawal from the regional partnership.

Indian discourse on agricultural protection is similar to the American discourse on immigration. Republicans and Democrats are, by and large, united that unchecked immigration is not sustainable. Whatever the economic benefits of lower labour costs with a large pool of immigrants, the social costs, particularly for workers living close to poverty, are unacceptable. It is puzzling why the same empathy can’t be shown to Indian farmers, and particularly women dairy farmers, who have few other avenues of employment.

Hopefully, someday, manufacturing and services in India will boom, reducing the stress on agriculture. However, until that day arrives, it should not be surprising to Trump and his advisors to fathom why it would be as difficult for Modi to abandon agricultural tariffs as it would be for America to abandon farm subsidies — they began in 1933 and have ranged from $9 to $55 billion in recent years.

The writer is distinguished university professor emerita, University of Maryland College Park and professor, National Council of Applied Economic Research, New Delhi. Views are personal