US Agricultural Export Push Rooted in Competitiveness, Surplus, and Political Pressure: Analysis by Sunil โSubramaniam
Despite agriculture employing barely 2% of โคits population, the United States continues toโค aggressively pursue greater market access for its โfarm products, a stance that remains a point of contention in international trade. According to Sunilโ subramaniam, Managing Director of Sundaram Mutual Fund, this insistence stems from a โconfluence of factors: the competitiveness of USโ agricultural production, โฃa surplus created by shifting trade dynamics, and significant political influenceโค from the American โfarm lobby.
Subramaniam explained that US agricultural competitiveness is largely due to a high degree of mechanization.โค “It is the only place where US production โฃis competitive with the rest โฃof theโ worldโฆand the reasonโฃ forโ that is the high degree of mechanization in their agriculture,” he stated. This mechanization translates into “huge farms, advanced harvesters and mechanized production โthat allow it to produce corn andโฃ soya at profitable international prices.”
The urgency of the US push has been amplified by recentโ trade developments. Subramaniam highlighted that China’s reduction in soybean imports from the US, implemented as a responseโ to previous US trade policies, has created a considerable surplus. “Chinaโฆhas drastically reduced their soya import from theโ US tremendously. So, the US is left with surplus soya now and so they are trying to find alternative markets,” he noted.
Looking at the situation from India’s perspective, Subramaniam emphasized the challenges surroundingโ genetically โฃmodified (GM) crops. He pointed out that while the US readily utilizes GM technology, Indian agriculture has largely remained protectedโ from it, and Europe – a key export market for India – maintains strictโ regulations on GM products.โ Allowing GM cropsโ into India, he warned, “could severely affect our โขexports to Europe.”
He also acknowledged domestic political considerations within India, statingโ that proposed agricultural reforms haveโข historically faced strong oppositionโฃ from farmer groups. “The farmer lobbyโฆis very strong. Any farm reforms have always been stymied by massive protests. โSo, it is aโค very delicate line that the government โhas to walk,” Subramaniam explained.
Beyond โคeconomic factors, Subramaniam underscored the significant role of political pressure within the US. He โidentifiedโ the American farm โlobby as a powerful financial supporter of President Trump. “The agriculture lobby, the rich farmers, are huge financiers โฃof Mr. Trump. So yes, he needs to take care of them,” he stated. โHe further notedโข that upcoming primary elections within the Republican party add another layer of political motivation. “There are primary elections coming up, which the Republican party needs to win, so that is undoubtedly also a โคfactor atโ play.” He suggested that China’s reductionโค in soybean imports hasโข exacerbated โฃthe situation, prompting increased pressure from the US administration.
Subramaniam identified three key drivers behind the US effort toโฃ increase agricultural exports: competitive production achieved through mechanization, a surplus of crops โresulting from decreased Chinese imports, and the strong political influence of โAmerican farmers.
As โtrade negotiations progress, the interplay of economic realities, โgeopolitical strategies, and domestic political pressures will continue to shape global agricultural policy, requiring India โto carefully navigate โฃtheโ balance between protecting its agricultural sector and maintaining positive diplomatic relations.
