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US Push for Agri Exports: The Key Factors Unveiled by Sunil Subramaniam
Sunil Subramaniam, Managing Director of Sundaram Mutual Fund, has highlighted three pivotal factors propelling the US push for increased agricultural exports:
– Competitive Production: The US excels in agricultural production due to a high degree of mechanization. Advanced technologies enable efficient farming practices, allowing for profitable production of corn and soybeans, despite agriculture contributing less than 1% to the US GDP and employing roughly 2% of the population.
– Surplus Stocks: The trade tensions with China have led to significant reductions in US soybean exports. As China scales back their imports, the US faces surplus stocks of soybeans, driving the need for alternative markets.
– Political Lobbying: A strong agricultural lobby in the US plays a significant role in shaping policy. This lobby is influential in political financing, particularly supporting key figures like former President Trump whose administration pushes for broader market access for agricultural products as primary elections approach.
Subramaniam elaborated that the interplay between these three elements—competitive production, surplus due to reduced demand from China, and strong political backing—fuels the urgency behind the US agricultural export agenda.
From India’s perspective, challenges arise, particularly concerning genetically modified (GM) crops. While GM crops are prevalent in the US, Indian regulations safeguard against their introduction, essential for maintaining access to European markets, which uphold strict standards against GM products.
In conclusion, the landscape of US agricultural exports is not merely about surplus and production efficiency; it is also a complex mixture of domestic politics and international trade dynamics. Balancing these factors becomes crucial for countries like India, which must navigate both agricultural protection and diplomatic relationships. The ongoing trade negotiations signify that the intersection of economics, geopolitics, and domestic interests will continue to influence global agricultural policies.