Safeguarding Smallholders: How India Can Protect Its Farmers In Global Trade Agreements

In an increasingly globalised agricultural market, India now faces a defining policy moment: how to integrate with global trade without leaving its smallest farmers behind. Unless we consciously build trade agreements that protect small and marginal producers, we risk repeating patterns of unequal growth, rising debt, asset loss and rural distress.

India’s Smallholders: The Challenges
Smallholder farmers in India are vulnerable to many structural problems. Their land holdings are not only small but also divided into several parts. They keep on incurring high input costs, the thickness of the market linkages is not good at all, and they are not in a position to influence the price at all. The global market access is tough for them too because of the stringent international standards, the very high cost of certification, and not being able to organise themselves in a strong manner.

Global trade deals often assume that farmers will automatically gain from greater access. But experience shows that unless the rules are designed with smallholders in mind, the gains are skewed. India must ask: Who benefits from trade liberalisation? And how can we ensure that our farmers are not simply opening their gates to competition, but gaining from new opportunities on fair terms?

Why Trade Agreements Must Prioritise Smallholders
Over 80 % of India’s farming households are small or marginal. Trade policies must take into account their vulnerabilities; otherwise, they will end up further widening inequality, deepening rural fragility and concentrating growth in large agribusinesses.

Prioritising smallholders is important for rural stability and food security. The ripple effects of marginalising their interests in any trade deal would harm the employment prospects of rural youth, trigger migration to cities and compromise the viability of villages as economic units. Another important aspect is resilience in global markets. Smallholder farmers who are part of reliable and authenticated value chains will have the advantage of riding the global price fluctuations and adding to their worth, instead of being just the losers in the case of import surges.
The world is recognising the traditional farming practices of India for their native knowledge and environmental sustainability. The scenario will be different if we ignore the small farmers; we will lose the original taste and the marketable potential in the case of Indian agricultural exports.

What India Needs to Do: Key Measures
Firstly, India must build treaty mechanisms that include safeguards for smallholders. When signing international trade deals, India must include sunset clauses, funds for adjustment programs for smallholders, and limits on import quotas for vulnerable crops grown by them. If imports threaten domestic produce grown by small farmers in any region of India, tariff safeguards should get triggered automatically. 

Secondly, India must facilitate access of smallholders to export-ready value chains. Capacity building, government credit, aggregation platforms, and certifications for organic or sustainability labels must be the pillars supporting the small farmers' groups. Besides, encouraging co-operative models, digital platforms, and farmer-producer organisations (FPOs) will further enable the connection between global traders and local farmers. 

India should allocate funds for risk mitigation as a third strategy.. When a trade deal impacts domestic producers, smallholders must receive support to help them transition to the new regime. This can include insurance schemes, retraining the farmers, credit support, and access to alternative crops or value-added processing. Adjustment programs sponsored by the government can cushion the shock of transition, preventing distress sales of farmlands and loss of livelihoods.

Fourthly, India needs to promote a proactive “Make in India” for agriculture and allied sectors. Just as manufacturing emphasises local value addition, the agriculture trade policy must encourage processing, packaging and branding within India. Keeping most parts of the value addition within the country will allow farmers to receive a fairer portion of the end-consumer price. By allowing the import of raw materials, machinery, and technologies necessary for domestic processing of agricultural produce, trade contracts should be set to realise this aim. In the situation of global pressure, that is, India's agricultural sector being forced into international trade, the issue for policymakers is: What is the way for India to manage its two objectives of economic growth from international trade and rural poverty alleviation? One should not be at the cost of others. The ongoing trade discussions with different nations are a strategic opportunity for policymakers to incorporate smallholder-friendly conditions into the negotiations, thereby making India not just an exporter of agricultural products but a country demonstrating fair and inclusive trade practices. 

There are many examples: places where smallholder farmers invested a lot of time and effort in creating organic farms only to lose their market due to the influx of cheaper imports; or farmer producer organisations that could have grown if a trade agreement had international niche export windows specific to the regions.. These narratives make trade policy real and human – they contextualise macro deals in the micro realities of India’s 140 million farming households.

India’s smallholders deserve to thrive — not just survive — in the global trade era. The diplomatic tables where tariffs are negotiated and standards are set must become arenas where the voices of marginal farmers are heard and their futures secured.

Views are personal