US Agricultural Export Push Rooted in Competitiveness, Surplus, and Political Pressure: Analysis by Sunil Subramaniam
Despite agriculture employing barely 2% of its population, the United States continues to aggressively pursue greater market access for its farm products, a stance that remains a point of contention in international trade. According to Sunil subramaniam, Managing Director of Sundaram Mutual Fund, this insistence stems from a confluence of factors: the competitiveness of US agricultural production, a surplus created by shifting trade dynamics, and significant political influence from the American farm lobby.
Subramaniam explained that US agricultural competitiveness is largely due to a high degree of mechanization. “It is the only place where US production is competitive with the rest of the world…and the reason for that is the high degree of mechanization in their agriculture,” he stated. This mechanization translates into “huge farms, advanced harvesters and mechanized production that allow it to produce corn and soya at profitable international prices.”
The urgency of the US push has been amplified by recent trade developments. Subramaniam highlighted that China’s reduction in soybean imports from the US, implemented as a response to previous US trade policies, has created a considerable surplus. “China…has drastically reduced their soya import from the 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 surrounding genetically modified (GM) crops. He pointed out that while the US readily utilizes GM technology, Indian agriculture has largely remained protected from it, and Europe – a key export market for India – maintains strict regulations on GM products. Allowing GM crops into India, he warned, “could severely affect our exports to Europe.”
He also acknowledged domestic political considerations within India, stating that proposed agricultural reforms have historically faced strong opposition from farmer groups. “The farmer lobby…is very strong. Any farm reforms have always been stymied by massive protests. So, it is a very delicate line that the government has to walk,” Subramaniam explained.
Beyond economic factors, Subramaniam underscored the significant role of political pressure within the US. He identified the American farm lobby as a powerful financial supporter of President Trump. “The agriculture lobby, the rich farmers, are huge financiers of Mr. Trump. So yes, he needs to take care of them,” he stated. He further noted 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 factor at play.” He suggested that China’s reduction in soybean imports has exacerbated the situation, prompting increased pressure from the US administration.
Subramaniam identified three key drivers behind the US effort to increase agricultural exports: competitive production achieved through mechanization, a surplus of crops resulting from decreased Chinese imports, and the strong political influence of American farmers.
As trade negotiations progress, the interplay of economic realities, geopolitical strategies, and domestic political pressures will continue to shape global agricultural policy, requiring India to carefully navigate the balance between protecting its agricultural sector and maintaining positive diplomatic relations.
