Should agricultural subsidies be stopped

Jan 30 • General • 2028 Views • 4 Comments on Should agricultural subsidies be stopped

An agricultural subsidy is a governmental subsidy paid to farmers and agribusiness to supplement their income, manage the supply of agricultural commodities, and influence the cost and supply of such commodities.

It is considered to be the most effective mechanism for accelerating the growth of agricultural sector.It works as a tool for developed countries to maintain their supremacy

The use of agricultural subsidies is widespread in the Caribbean. The objectives are: to encourage adoption of improved agricultural practices for increasing agricultural production and conservation of natural resources. The subsidies are provided in the form of cash, production inputs and, more recently, as rebates on income taxes. There are many rather small cash and other incentives. Farmers do not perceive these as incentives to practice adoption but rather as snippets of assistance or dole provided by governments to farmers. This perception, plus the disproportionate amount of energy and time small farmers must exert in order to obtain these small subsidies can create in them feelings of irritation and frustration. As a result they tend to perceive these small subsidies as needed nuisances, more bane than boon. Caribbean farmers are market oriented and respond to meaningful monetary incentives. Given a choice they would prefer to have an assured market and a “reasonable” price for their farm produce or the availability at reduced prices of production of marketable produce.

Subsidies in Indian agriculture have increased significantly in the post-reforms period. Food subsidies increased from Rs. 2,850 crore in 1991-92 to about Rs. 72,823 crore in 2011-12 (Revised Estimates), an increase of over 25 times in 21 years (Table 1). As a result, its share in total central government subsidies under non-plan expenditure increased from 23.3 percent to 33.7 per cent between 1991-92 and 2011-12. As a percentage of agricultural GDP, the food subsidy increased from 1.8 per cent to 5.8 per cent during 1991-92 and 2010-11. Food subsidy, which increased at an annual compound growth rate of about 17.8 per cent during the 1990s, remained stable between 2002-03 and 2006-07 mainly due to low off take of food grains and marginal increases in procurement prices. However, there has been a significant increase in food subsidy during the last few 5-6 years. For example, food subsidy more than tripled from Rs. 24,014 crore in 2006-07 to Rs. 72,823 crore in 2011-12 and is estimated to cross Rs. 75,000 crore in 2012-13, at an annual compound growth rate of 21.6 per cent.

Tell us Your Queries, Suggestions and Feedback

Your email address will not be published.

4 Responses to Should agricultural subsidies be stopped

  1. Urvashi Khanduja says:

    No agricultural subsidies should not be stopped because the main occupation of India is agriculture. There are 6 lakhs villages in our country. About 80% farmers are small scale land holders and remaining are middle and large. When subsidies are not provided then how will they survive. Subsidies are the only way to improve the financial condition of poor farmers. As agricultural sector grows,India moves one step up towards the development of the country.

  2. Pallavi sinha says:

    In my point of view it should not be stopped specially in developing countries as it give financial and moral support to the farmer to cultivate more which is beneficial to increase the gdp and export business in countries like India where 70% people are living in villages and depend upon agriculture for their sustain.

  3. Pallavi sinha says:

    In my point of view it should not be stopped specially in developing countries as it give financial and moral support to the farmer to cultivate more which is beneficial to increase the gdp and export business in countries like India where 70% people are living in villages and depend upon agriculture for theis sustain.

  4. Roshani Mishra says:

    Agriculture subsidies should not be stopped as it has impacted alot -Global food prices and international trade, poverty in developing countries, Haiti and US rice imports, on nutrition, cross border movement of business, non farming companies and many more..Moreover countries like New Zealand, Africa and United states etc has gained alot through their agricultural policy.

« »