give a views regarding where subsidiary should ( be given or not ) in agriculture sector. justify your answer.
Subsidy refers to the availability of inputs at a lower cost than the market prices to the farmers.
The arguments in favour of subsidies are as follows:
- They induce the farmers to adopt the new agricultural technology.
- The use of modern inputs can alone increase agricultural production and productivity through intensive farming.
- If agricultural inputs are not subsidized, the poor and marginal farmers will not be able to use them and this will lead to a decline in their income and productivity levels.
The views against subsidies are:
- The usefulness of technology has already been proved. Hence, subsidies should be phased out.
- The benefits of subsidies have been mainly reaped by the rich farmers in the advanced regions only.
- The fertilizer subsidy has helped the fertilizer industry more than it has benefitted the farmers.
- The availability of cheap inputs has led to :
- Excessive and wasteful use of inputs
- Rise in the cost of production
- Degradation of land
- Pollution of water resources
- Over exploitation of groundwater.
- The burden of subsidies on the government is making them economically unsustainable.