Listen To This Post
Written By: BHUPINDER SINGH HOODA TheNewsDose.Com
Former CM, Haryana, Headed the Congress Committee on Agriculture and Farm Welfare
US President Donald Trump’s decision to impose a steep 50% penal tariff on Indian agricultural products is more than a diplomatic jolt — it’s a reminder of how unequal the global farm trade truly is. Washington has justified the move as “reciprocity” for India’s refusal to open its markets to US grains, dairy, fruit, and fish. In truth, it is the familiar playbook of rich nations: demand access for their subsidised surpluses while shielding their farmers through lavish state support.
India’s stand was the right one, both economically and socially. Agriculture sustains 42% of our population and employs 46% of our workforce, yet contributes less than 20% of GDP. This imbalance means that most Indian farmers remain trapped in debt and poverty. The recent NABARD(National Bank for Agriculture and Rural Development) Rural Financial Inclusion Survey reveals that an average farming household earns ₹13,661 per month, with a mere ₹4,476 from actual farming. The rest comes from supplementary work, such as labouring or petty trade. Opening the floodgates to the highly mechanised, subsidy-backed output of US farms would devastate these fragile livelihoods.
The United States spends over $48 billion annually on domestic farm support, according to WTO data. These include Crop insurance subsidies covering up to 60% of premiums, whereas our farmers are waiting for compensation for their produce losses under PMFBY (Pradhan Mantri Fasal Bima Yojna). Second, in the US, price guarantees and marketing loans ensure that farmers earn above-market rates. Our farmers are waiting for a legal guarantee of MSP, as per Swaminathan’s recommendations. Third, Export-linked supports are disguised as food aid and development programmes.
These subsidies allow US wheat, corn, or dairy farmers to sell abroad at or below cost without losing income. India’s WTO-notified support — the Aggregate Measurement of Support (AMS) — is less than 5% of production value, far below the 10% limit allowed for developing countries. This is not competition; it’s an uneven playing field tilted steeply against small producers.
Only 2% of the US population works in agriculture; in Germany and the UK, it’s just 1%, in Japan 3%. India’s share of 46% is in the company of Afghanistan (45%) and North Korea (47%). Even China, which in 1991 had 63% of its workforce in agriculture, has cut the number to 22% — below the global average of 26%. India, by contrast, has barely moved the needle in three decades.
Structural weaknesses make matters worse. Average farm size has shrunk from 2.28 hectares in 1971 to 0.74 hectares in 2021 — too small for efficient mechanisation. Input costs — diesel, fertilisers, seeds — have risen faster than crop prices, squeezing margins. And yet, the proportion of workers in agriculture has increased from 44% in 2017–18 to 46% in 2023–24, driven by reverse migration post-COVID. That is a symptom not of farming’s attractiveness, but of manufacturing and services failing to create the 7.9 million jobs a year India needs.
There is no glory in subsistence farming. Clinging to protectionism without reform is like keeping patients comfortable without curing the disease. Tariff shields should be used as strategic breathing space — not as permanent barricades.
India’s decision to refuse the opening of agricultural markets to U.S. imports was a necessary measure to protect our farmers in the short term. However, in the long run, genuine farmer welfare demands more than simply keeping competition at bay. It requires equipping farmers with the essential tools, providing market access, and creating alternative employment opportunities that enable them to thrive without perpetual protection. To achieve this, we must implement three urgent and decisive shifts:
First, India must accelerate labour transition by transitioning millions from low-yield farming into manufacturing and services, following the model established by China. This calls for a focused industrial policy that targets labour-intensive sectors like textiles, food processing, and light engineering, coupled with robust rural skill training and urban job creation.
Second, we must prioritise farm consolidation and mechanisation. By promoting cooperative farming, reforming land leasing, and supporting Farmer-Producer Organisations (FPOs), we can effectively reverse land fragmentation. Pooling holdings allows for the viability of modern irrigation, storage, and precision agriculture, which will significantly increase yields and lower per-unit costs.
Third, we need to boost value addition and enhance export competitiveness. India’s agricultural exports, which stand at $48.15 billion for 2023–24, could experience substantial growth through improved logistics, branding, and quality certification. Reducing post-harvest losses from the current 15–25% to the global standard of 5% can release vast quantities for export.
Furthermore, India must take a firm stand against the hypocrisy of wealthy nations in multilateral forums. The U.S. and EU’s so-called “Green Box” subsidies, which they claim are non-trade-distorting, effectively grant their farmers an unfair advantage in global markets. New Delhi should demand a recalibration of subsidies under the WTO’s Agreement on Agriculture, ensuring that the food security and procurement programs of developing countries are protected. At the same time, the support for affluent nations is scrutinised.
While Trump’s tariffs may be temporary, the structural weaknesses in Indian agriculture are permanent unless we act decisively. Without significant reform, our farmers will remain vulnerable—not only to the whims of Washington but also to the harsh realities of global competition. Protection must be seen as a strategic bridge to competitiveness, not a blanket substitute for it.
India has the opportunity to seize this moment and drive structural change—shifting excess labour into higher-value sectors, consolidating and modernising farms, and enhancing our competitive agri-exports. The next time a foreign leader imposes a tariff, we will not react with fear but with confidence. Until then, we must maintain a protective shield, but let its purpose be explicit: to buy time for transformation, not to entrench a stagnant status quo.
Our farmers’ welfare must take priority. While this sentiment is correct, it is also incomplete. Farmer welfare cannot and should not equate to indefinite shelter behind tariff walls. Protection serves a purpose, but it is reform that will ultimately secure our agricultural future. For this, the ‘Rashtriya Kisan Kalyan Kosh’, a separate budget like defence, is the need of the hour.
