The pressure on India to import U.S. corn is a direct result of the U.S. system’s historical reliance on generating surplus, but India's resistance is rooted in protecting its domestic economy.
The U.S. system, built on government subsidies and high capitalist efficiency, results in chronic overproduction and a constant need for external markets.
India, however, has strong reasons for refusal:
The GM Barrier: India only allows GM cotton and views GM corn as politically difficult to import, citing fears over it entering the food chain.
Economic Destruction: The cheap U.S. corn (priced at about 70% of Indian maize) would be equivalent to dumping, which would destroy India’s newly built maize ecosystem for ethanol and cause "much distress" to new maize farmers.
Defeating Policy Goals: Importing corn defeats the purpose of India's ethanol program, which aims to achieve import substitution and cut the oil import bill, thereby putting money back into the pockets of Indian producers, including farmers.
For India, accepting the U.S. corn surplus means risking a historical precedent, reminiscent of how cheap U.S. corn drove over a million Mexican farmers out of business after NAFTA.
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