Context
The article explores the tension between global trade liberalization and the protection of agricultural livelihoods in India. It highlights how agriculture’s social and political salience makes it difficult for policymakers to prioritize global trade pressures over domestic employment and welfare concerns.
Key Highlights
- India–US Comparison in Agriculture
- American agriculture is highly mechanized and large-scale, employing fewer workers but producing more.
- Indian agriculture remains labour-intensive and smallholder-driven, employing a significant share of the population despite contributing only about 17% to GDP.
- This contrast creates different political economies: agricultural distress in India affects far more people than in developed countries.
- Policy and Political Dimensions
- The article notes similarities between India’s agricultural protectionism and US political debates:
- Both Republicans and Democrats in the US and Indian political parties recognize that unregulated trade can devastate farm livelihoods.
- Protectionist tendencies emerge because agricultural employment supports a large rural population vulnerable to poverty.
- Governments across ideologies (Trump in the US, Modi in India) have been cautious in trade negotiations involving agricultural products.
- Economic and Social Implications
- Despite modernization, agriculture still sustains about half of India’s population.
- Opening markets to global competition threatens price stability and farm incomes, especially for small and marginal farmers.
- Sectors like dairy farming and cooperative agriculture (e.g., Amul) are crucial for rural livelihoods and socio-economic balance.
- Trade liberalization could worsen rural unemployment, leading to urban migration and poverty.
- Case Study: Gujarat’s Dairy Sector
- Gujarat’s dairy cooperatives (like Amul) employ and empower millions of women.
- Proposals for including dairy in regional trade agreements (RTAs) were met with strong public resistance.
- India withdrew from RCEP (Regional Comprehensive Economic Partnership) in part due to dairy-related livelihood concerns.
- Structural Challenges
- Agricultural reforms are essential for productivity but must be sensitive to social realities.
- The agricultural workforce forms the backbone of rural society, and any trade or economic reform ignoring this balance risks social unrest.
Mains Question
“Agriculture in India is not just an economic activity but a political and social stabilizer. Discuss how this reality influences India’s trade policy decisions.”