In agriculture, US-India trade deal is both good and not-so-good

Indian agriculture is not a monolith, it has both dynamic and not-so-dynamic components. The sector’s overall average annual growth of 4.4 per cent during 2014-15 to 2023-24 has primarily come from livestock and fisheries, with their respective gross value added rising by 7.2 per cent and 8.9 per cent, according to NITI Aayog member Ramesh Chand. On the other hand, the crops subsector has recorded just 2.8 per cent annual increase. And within that, there’s a clear difference between faster-growing horticulture (fruits, vegetables, condiments and spices) and the relatively sluggish field crops segments. It’s not for nothing that the nearly-sealed India-US bilateral trade agreement has met with a varied response. The poultry, dairy and aqua industries have largely welcomed it, while soyabean, maize and even sugarcane growers and processors won’t be as happy.

For animal farmers — those raising cattle, poultry, fish and shrimp —feed is a significant cost element. Opening the door to imports of red sorghum and distiller’s dried grains with solubles from the US can provide access to potentially cheaper and better-quality feed ingredients. That, and India not giving concessions to American dairy or poultry product imports, makes this an unquestionably good deal for the animal husbandry sector. From an equity standpoint, too, livestock farming is a more labour- than land-intensive economic activity, while contributing a higher share of income for marginal agricultural households. Any analysis of the impact of policy — whether trade or subsidies and cash transfers — on “agriculture” must look at different subsectors and the predominant farmer types engaged in each of these.

The crops subsector is more likely to be affected by the increased market access for US farm produce. That has as much to do with agronomy as domestic policy failures. Average corn and soyabean yields in India are a third, or even less, of those in the US. Washington apple yields, at over 48 tonnes per hectare, are way above the corresponding average of 12 tonnes for J&K and 5 tonnes for Himachal Pradesh. Indian maize and soyabean farmers have been denied the right to plant GM seeds — and are now forced to compete with their more productive American counterparts deploying these technologies. Neither has much effort gone into promoting high-density planting, renewal pruning, drip irrigation and precision nutrient management techniques to improve yields and fruit quality in apple orchards. Policy should enable Indian agriculture to be more market-oriented and globally competitive. And some segments already are.