A cultural exchange between American students and Indian villagers highlighted stark contrasts in rural life. While American farms rely on mechanisation and large-scale operations, Indian farms are small, labour-intensive, and less productive. In India, 45% of the workforce is engaged in agriculture compared to less than 2% in the US.
The Trade Dilemma
Agriculture accounts for just 17% of India’s GDP but supports nearly half its workforce. This imbalance makes farm incomes politically sensitive. Unlike the US, where subsidies and efficiency drive competitiveness, India faces structural challenges in productivity and employment generation. Tariff negotiations between the two nations reflect these deep asymmetries.
The Dairy Dimension
India contributes nearly a quarter of global dairy output, but consumption is almost entirely domestic. Unlike the corporatised US model, India’s dairy sector is decentralised, with millions of smallholder families and women playing central roles. Cooperatives such as Amul and Mother Dairy sustain rural economies, pooling milk from millions of producers. This grassroots model underpins food security and livelihoods.
Politics of Protection
Protecting agriculture remains a political red line in India. In Gujarat, home to cooperative dairying, women dairy farmers mobilised against regional trade agreements, forcing policy shifts. Just as immigration is a politically unifying issue in the US, agricultural protection unites political parties in India.
Lessons from Policy
Both nations face democratic pressures shaped by their rural realities. For the US, subsidies have remained entrenched since the 1930s, while in India, tariffs safeguard vulnerable farmers. Until India creates sufficient non-farm jobs in manufacturing and services, opening agricultural markets to global competition risks destabilising rural livelihoods.
