India-US trade deal: PM Modi will never compromise interests of our farmers, says Suresh Prabhu

Time of India

28-04-2025

As India and the US negotiate a trade deal, concerns arise about potential US demands for access to India's
agriculture
and
dairy
sectors. However,
Suresh Prabhu
, Chairman of
Indian Chamber of Food and Agriculture
(ICFA), believes that Prime Minister
Narendra Modi
will protect the interests of the Indian farmers.
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In a freewheeling chat with ET, former Union Minister Suresh Prabhu also highlights the need for careful management of genetically modified (GM) technologies, which can boost agricultural productivity but also pose ecological risks. While GM tech could help address India's food security challenges, Prabhu stresses the importance of thorough scientific and ecological research to understand its implications before implementation. Edited excerpts:
The Economic Times (ET): Can India consider offering the US access to select areas of agriculture and dairy in its proposed bilateral trade agreement?
Suresh Prabhu (SP):
I have handled trade issues earlier with the US as India's Commerce Minister, and agriculture access is one key issue. I am sure our PM is very well aware of the situation. He will never compromise the interests of our agriculture and dairy farmers.
ET: India's September 2024 import duty hike on vegetable oils aimed at supporting local farmers, but domestic prices didn't respond as expected. Despite the duty increase, soybean and groundnut prices fell below Minimum Support Price (
MSP
), failing to benefit farmers as intended. What is the reason behind this?
SP:
You should be very conscious about the fact that trade policies and the intervention we make are handled very judiciously, carefully and calibrated in a way that will protect both interests of farmers and consumers. Over time, we have seen certain commodities and products are extremely sensitive from the perspective of both the stakeholders.
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During my tenure as Commerce and Industry Minister, we formulated and got cabinet approval for an agricultural export policy. The policy aimed to address surplus production, which can disrupt prices, since increased production doesn't automatically translate to higher consumption. When there's surplus production and consumption doesn't keep pace, prices tend to fall, impacting farmers. In the case of vegetable oils, it's a staple in cooking for everyone, so protecting farmers' interests while also addressing consumers' needs is crucial.
So, we had to constantly follow up to find out what effect these duties are having. There are market intervention programmes that need to be carried out very carefully. So, if prices fall below MSP, it indicates that farmers are not even recovering their production costs. It's a very important issue that requires attention.
ET: Why is India struggling with self-sufficiency in edible oils and pulses? A section of agricultural economists suggests that India should adopt GM varieties to achieve self-sufficiency. What are your views?
SP:
GM interventions require careful handling; proper studies and understanding are essential before adopting such technology. GM technology can boost farm productivity, but it also poses potential long-term risks to the ecosystem. Since GM crops are unnatural, they may have unintended consequences on other crops, the environment, and the ecosystem as a whole; thorough understanding and caution are essential.
We can't rush into decisions without thorough studies. Moreover, as a country with only 2.2% of the world's land and limited arable area, we are confronted with growing demands stemming from population growth and increased consumption as poverty levels decline.
As demand rises due to population growth and increased consumption, GM technology may help address food security challenges. However, it's crucial to conduct thorough scientific and ecological studies to understand its implications before adoption, which is why we initiated research in 1998.
ET: Some agri-experts believe MSP provides a vital safety net for farmers by guaranteeing minimum crop prices, shielding them from market volatility. Others argue that MSP only mitigates price risk, leaving production and market risks unaddressed. What is your take on MSP in agriculture in India?
SP:
MSP is a vital policy tool, but it should be complemented by other support systems. A proper warehousing system and agro-processing infrastructure can help stabilise prices and support farmers. For instance, onion prices highlight the need for better market support mechanisms to prevent extreme price fluctuations that can have devastating effects on farmers.
The onion price issue highlights the disconnect between farmers' interests and middle-class concerns. While price spikes affect consumers, farmers also suffer when prices plummet. What's needed are systemic solutions like warehousing and storage to stabilise prices, benefiting both farmers and consumers in the long run.
MSP is crucial as a reference price and assured income for farmers, mitigating market risks in an inherently risk-prone sector like agriculture, especially with climate change. However, MSP alone isn't enough; complementary measures like cold storage, warehousing, and technology can further support farmers. Initiatives like the cold storage project in Lasalgaon, a major onion-growing area, demonstrate how targeted interventions can make a difference.
ET. The Centre's attempt to implement the three farm laws in 2020 was met with strong opposition from farmers, leading to a year-long protest. Eventually, the government was forced to repeal the laws in 2021, acknowledging farmers' concerns. What steps should the government take to get farmers on board?
SP:
One major challenge farmers face is limited market access, partly due to legislative barriers like the Agricultural Produce Market Committees (APMCs). Although APMCs aimed to ensure better prices, their monopolistic nature has often hindered farmers. Allowing farmers to sell their produce at their preferred price and location could be a key solution, as suggested by various committees.
Any significant change, like reforming APMCs, requires thorough stakeholder engagement. I recall my experience as Power Minister, where we conducted 1,500 roadshows before introducing the Electricity Act. This extensive consultation led to a unanimous passage of the law, demonstrating the importance of inclusive dialogue.
Reforms should prioritise the interests of farmers and engage them in the process to ensure better outcomes. By taking farmers on board, we can build trust and create more effective solutions.
ET: India's small and fragmented landholdings pose significant challenges to implementing large-scale sustainable agricultural practices like crop rotation, agroforestry, and precision farming. What should be done in such a scenario?
SP:
Land fragmentation is an inevitable reality due to family growth while land remains fixed. The challenge lies in developing technologies that enhance productivity and output on these small holdings. This requires a deep understanding of soil health and tailored solutions to maximise efficiency.
Soil is the backbone of fertility, not just the land itself. Preserving topsoil is crucial, especially on fragmented land holdings, where the goal is to maximise production without degrading the soil. Soil security is directly linked to food security; without healthy soil, food security is unattainable. Yet, while we prioritise water, energy, and border security, soil security often gets overlooked. It's time to take soil conservation seriously.
ET: The overuse of chemical inputs in Indian agriculture has resulted in severe environmental consequences, including soil degradation, biodiversity loss, and water contamination. According to ICAR, around 30% of India's agricultural land is degraded due to excessive chemical use, highlighting the need for sustainable practices. What should be done without affecting productivity, which still needs to be further increased?
SP:
The judicious use of chemical fertilisers is crucial. India's NPK (Nitrogen, Phosphorus, and Potassium) ratio is imbalanced due to excessive urea use. A balanced approach to fertiliser application is necessary to maintain soil health and ensure sustainable agriculture rather than completely eliminating chemical fertilisers.
ET: India faces significant post-harvest losses due to inadequate storage, poor transportation, and inefficient supply chains. These losses hinder farmers' ability to invest in sustainable practices and impact their profitability. How can infrastructure be made stronger in agriculture?
SP:
The often-cited figure of 30% post-harvest loss lacks a clear origin, yet the focus should be on reducing these losses regardless of the exact number. Improving infrastructure to link farms to markets effectively can play a key role in minimising post-harvest losses.
Processing agricultural produce can help reduce losses and add value, but it's essential to distinguish between value-added processing and unhealthy processed foods. The focus should be on developing processing methods that benefit farmers without compromising consumer health.