The Congress party has staged a forceful opposition to the India-US interim trade agreement saying that this will cast down the Indian agriculture and lower the cost of crops in various major mandis. Although the government is selling the deal as a moderate opening, which will increase exports and enhance strategic relations with Washington, the congress leaders demand that the fine print poses serious threats to farmers particularly in the crop types that are already struggling to cope with low prices and the threat of imports.
The key point of the Opposition criticism lies in the access of farm products of the US to the market. The trade minister Piyush Goyal has also affirmed reduction in tariffs of certain American agricultural products including animal feeds such as distillers dried grains with solubilities (DDGS), red sorghum, fresh and processed fruits, soybean oil and some nonalcoholic beverages, but adds that sensitive staples such as dairy, prime cereals and most pulses are not subject to tariff reduction. Leaders of congress respond to this partisan opening by arguing that this creates still vulnerable areas of Indian agriculture to low-cost, highly-subsidised US imports. They caution that corn, cotton, soybeans, edible oils and fruits will become dumping grounds in India, the margins of small and marginal farmers are already meager.
Rahul Gandhi has made this attack sharper by associating this pact with the genetically manipulated crops and dependence on supply chains over the long run. His enquiry has been whether by permitting DDG imports, Indian cattle would be essentially fed on GM American maize grain, attaching the dairy ecosystem of India to US agribusiness. The effect of the potential import of GM soya oil has also been alerted by Gandhi on the farmers in such states as Madhya Pradesh, Maharashtra and Rajasthan, the farmers who are already struggling with the weak mandi prices.
These issues are not abstract. Following the announcement of the trade agreement, soybean prices in key production states have fallen below the minimum support price after a short-lived rise pushed the rates above MSP in months of misery. Mandi reports in Madhya Pradesh and Maharashtra indicate sustained falling of over 150/qtr in a week, which leaves one worrying what the additional opening up in terms of imports would do to the price trends. Farmer groups note that soybean and maize were already trading 2025 below MSP and are afraid of even more losses should imported feed and oils become more competitive.
Congress has even insisted on a clarity on the effects on the horticulture and high value crops. The leaders of the opposition claim that the attractive entry of the US apples, berries and other fruits would strike down growers in Jammu and Kashmir, Himachal Pradesh and the Northeast who are still trying to overcome the previous price fall and climatic disasters. They doubt whether the pact has established any protection measures like trigger tariffs or seasonal quotas against the abrupt influx of imports to the domestic producers.
At the policy level, the party has also posed constructive questions on what will happen to MSP and protection of tariffs in the case of a fuller free trade agreement being implemented as a result of the agreement. According to the leaders of Congress, as India reduces duty on various products of the US, the US tariff on most Indian products is still high, which, they say, puts this country in an unequal trade system in favor of rural India. They have demanded a break down of the government on product level in disclosure and a debate on the issue in parliament before they can make any deeper commitments.
At present the government adheres to the argument that its red lines on dairy, major cereals/millets and most pulses will not be removed, and Indian tea, coffee, spices, and coconut products will have accession to the American market without duty. However with soybean, maize and onions prices turning jittery to trade headlines, Congress is grappling that aggrieved farmers will continue to ensure that the cost of agriculture in the India-US trade deal remains on the spotlight.
