Indian agriculture has registered a growth of 4.6 per cent in FY 2025, and further growth of similar magnitude a decade hence can reach us to 5 per cent growth. It is vital for India to become a developed nation.
India’s agricultural growth is associated with crops and non-crops. The share of crop sector has declined, and yet it remains the largest contributor comprising cereals, pulses, oilseeds, other field crops, and horticulture. The non-crop sector consists of livestock (with milk-production remaining dominant), fishing, aquacultures. The rising share of non-crop sector is remarkable.
While free trade deals are negotiated, we have to bear in mind the interests of six million farmers who cultivate crop. To illustrate, US origin soyabean prices are around $ 390 a tone, whereas India’s MSP is $ 620 a tone. If there are cheaper imports at lower prices, our domestic cultivation will be affected. The difference in cost is on account of the large farm holdings in the US, that give them economies of scale. The average size of farm in US is 466 acres whereas in India it is less than 2-7 acres.
While negotiating a deal, we have to consider the India tariffs on agricultural goods of 396 per cent which is eight times the tariff the US charges. India’s tariffs must come down. There should be quotas set. However, 80 per cent of Indian agriculture is competitive. There are some exceptions — wheat and dairy items (skimmed milk powder).
There is always some give and take in negotiations. We should decide what we can export to the US in return for allowing them access to Indian markets. We can promote high value horticultural products such as bananas, mangoes, grapes, promegranates. In return, we can lower duties on walnuts, apples, cranberries and blueberries which we hardly produce or produce in negligible quantities.
Onboarding farmer unions is a recipe for successful trade negotiations.
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