Indian Agriculture Needs Vietnam’s 1986 Đổi Mới Transition

China’s 1980s reforms and Vietnam’s 1986 Đổi Mới transition liberalised agriculture, improved rural incomes, and maintained equity.

By Sahasranshu Dash

On June 17, 2018, I co-wrote an article in Spanish with an Argentine colleague titled “Accumulating Misery: India’s Role in Global Accumulation”, a sharp critique of India’s integration into the global economy and the logic of agrarian capitalism. It was published in El Aromo, the cultural-political magazine of Razón y Revolución, an Argentine Marxist organisation affiliated with the Centro de Estudios e Investigación en Ciencias Sociales (CEICS): https://razonyrevolucion.org/acumulando-miseria-la-perspectiva-de-india-como-motor-de-la-acumulacion-internacional/ It diagnosed persistent rural poverty, informal labour and smallholder distress as symptoms of a global system exploiting Indian agriculture for surplus extraction.

Today, many of those structural concerns remain—but my outlook on the solutions has shifted. I still care deeply about labour rights, rural equity, and smallholder livelihoods. But I now believe that market orientation, agro-industrialisation, agricultural exports, and private investment, when designed inclusively and democratically, are not enemies of equity—they may be our best bet to achieve it.

Surplus Producers, Struggling Farmers

India is an agricultural paradox. We are the world’s largest milk producer (230+ million tonnes in 2023–24), the second-largest producer of rice and wheat, and among the global top five for fruits, vegetables, pulses, cotton, and sugarcane. In 2023–24 alone, we produced over 330 million tonnes of foodgrains and 400 million tonnes of horticultural crops. Wheat output alone rivals the pre-war production of Ukraine and Russia combined.

This is not a subsistence economy. By output alone, we should be a global agricultural powerhouse. And yet, most Indian farmers remain trapped in poverty.

Structural Inefficiencies and Market Failures

Over 80% of Indian farmers are smallholders, often forced to sell immediately after harvest when prices are lowest. Without adequate storage or access to credit, they have no option but to take what they’re offered. Farmers typically receive merely 30–40% of the consumer price, with the rest consumed by middlemen, logistics, and outdated procurement systems.

Take, for instance, electronic Negotiable Warehouse Receipts (eNWRs)—a promising tool that lets farmers store crops in certified warehouses and borrow against them while waiting for better prices. But in 2023–24, only 1.24 million tonnes—less than 1% of foodgrain output—was financed via eNWRs, and traders, not farmers, were the main users.

The issue is not markets per se—but the dysfunctional, fragmented markets India has built and the way most actual farmers cannot leverage their efficiencies.

The Human Cost of Indebtedness

Over 300,000 Indian farmers have taken their lives since the 1990s—many trapped in cycles of debt, crop loss, and market volatility. Suicides are not just a personal tragedy but a systemic indictment. Only structural changes—guaranteed income floors, risk buffers, and real market access—can end this quiet epidemic of despair.

Protests, Policy, and Rethinking Reform

I supported the farmers’ right to protest against the three central farm laws in 2020-21, because I understood their pent-up frustrations and fears of losing out to major agri-business monopolists. However, I also supported the substance of the laws: creating alternative marketing channels, encouraging investment, and reducing monopoly power. Their repeal resolved a political standoff, but left the deeper crisis untouched. We don’t need to isolate farmers from the market, but need to build markets that serve them.

That means rethinking infrastructure: investing in cold chains, rural logistics corridors, and warehouse networks close to farms. It means enabling direct access to buyers—exporters, processors, aggregators—through well-supported Farmer Producer Organisations (FPOs). It means shifting income support from rigid MSPs to price deficiency payments that protect income without distorting markets. And it means digitising and expanding crop insurance, to offer real protection in an era of climate volatility.

Learning from China and Vietnam

India need not start from scratch. China’s 1980s reforms and Vietnam’s 1986 Đổi Mới transition liberalised agriculture, improved rural incomes, and maintained equity by pairing market liberalisation with infrastructure investment, rural industrialisation, and strong local institutions.

India’s approach has been far more hesitant and fragmented, often reactive rather than strategic. But bold reform can be done democratically—with consultation, safeguards, and a clear vision of inclusive growth. The authoritarian attempts to crush farm protesters were problematic, but the policy solutions have to be more or less the same, this time with consensus-building and better explanation.

Gender, Labour, and Structural Transition

India’s agriculture is not only overburdened—it is feminised and underpaid. Around 45% of India’s workforce remains in agriculture, a sector contributing only 15% of GDP. More than half of these agricultural workers are women, disproportionately trapped in unpaid or informal labour. This is not a mark of empowerment—it is a symptom of exclusion from higher-productivity sectors.

Agricultural reform must therefore be paired with industrialisation and urbanisation, to absorb surplus rural labour—especially women—into manufacturing, services, and skilled non-farm jobs.

Are We Moving Forward?

To assess whether Indian agriculture is being treated as a serious economic sector—or still merely as a site of welfare delivery—we must look at what has actually been done.

In FY2024–25, the Ministry of Agriculture received ₹1.32 lakh crore. Flagship schemes like PM-Kisan continued with ₹60,000 crore, MSPs rose modestly, and foodgrain output exceeded 330 million tonnes. There were encouraging moves in climate-resilient seeds, agro-R&D, and natural farming. But these remain piecemeal efforts—not the kind of structural transformation agriculture requires.

The FY2025–26 Budget slightly increased allocation to ₹1.38 lakh crore. PM-Kisan rose to ₹63,500 crore; credit interest subsidies stood at ₹22,600 crore. But crop insurance was slashed by 23% to ₹12,242 crore—its lowest level in years—despite rising climate volatility. This contradicts the stated commitment to “climate-smart agriculture.”

On the positive side, allocations to RKVY, PM-AASHA, and Krishionnati Yojana improved. A ₹20,000 crore push for private-sector R&D was announced. Most ambitiously, the government launched the PM Dhan-Dhaanya Krishi Yojana: a ₹24,000 crore/year umbrella programme to unify 36 schemes across irrigation, storage, inputs, and logistics, targeting 17 million farmers.

But execution—not expenditure—will determine success. Unless these funds reach the ground in the form of working mandis, cold chains, and empowered farmer collectives, they risk being swallowed by bureaucracy and elite capture.

In the 2024 elections, the BJP emphasised digitalisation, irrigation, agri-startups, and value chains, while steering clear of the repealed farm laws. The INDIA alliance promised legal MSPs, subsidies, and waivers—but largely sidestepped institutional or infrastructural reform. Yet both sides missed the central challenge: turning agriculture from a low-productivity, subsistence trap into a high-value, employment-generating, export-ready sector. No major coalition spelled out how to transition Indian farming into a viable 21st-century industry.

Dr B.R. Ambedkar called Indian agriculture “a gamble in the monsoon,” warning that hereditary smallholding leads to perpetual poverty. He advocated for cooperative farming, tenancy reform, and industrial expansion. A century later, his words remain prescient. India needs to stop treating agriculture as the last resort of the poor and start building viable off-ramps—through rural industrialisation, urban employment, and infrastructure that links farms to markets.

Reform must be inclusive, democratic, and data-driven. India must build rural infrastructure where crops are grown—not just where they are consumed. Mandis must become competitive, transparent, and accessible. MSPs should evolve into income protection rather than procurement guarantees. Smallholders, especially women, must be empowered to participate in formalised, higher-productivity supply chains.

In 2018, I co-wrote that India was “accumulating misery” by extracting surplus while leaving farmers impoverished. That diagnosis still holds. But the solution is not to insulate farmers from markets: it is to build markets that work for them.

We produce like giants. It’s time our farmers stopped living like debtors.

(Sahasranshu Dash is research partner at the South Asia Institute of Research and Development in Kathmandu, Nepal)

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