UPSC IAS exam preparation - Indian Agriculture and related issues - Lecture 5

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Farm subsidies and MSP mechanism in India - Part 2

[हिंदी में पढ़ें ]

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5.0 THE FUTURE OF SUBSIDIES

Most of the studies commissioned from time to time have either supported distributing subsidies or withdrawal of subsidies. However, a particular study reveals that some subsidies should be given and some others can be withdrawn without harming the farmers. Withdrawal of subsidies should be carried out in phased manner. Following are the some suggestions emerging out of a particular study:

The central government should adopt some criteria to give away subsidies to states either on the basis of gross cropped area or productivity. From the study it has been noted that subsidies which have a direct relationship with productivity and income like seeds, fertilizers should be given to farmers; on the other hand, subsidies on electricity can be withdrawn as supply of electricity in Punjab is irregular. Moreover farmers prefer regular supply of power even if they have to pay for it. If implemented, it will reduce the state electricity boards’ (SEBs’) burden and this amount can be used for production of more electricity, reducing the need of purchasing electricity at very high prices, which adds to the deficit of state finance.

Government should formulate farmer friendly agriculture price policy, under which the price of farm produce should be fixed keeping in view the rising costs of farm inputs; this will help in making the farmers financially independent. In view of drought/deficit rainfall in certain regions (Bihar, Jharkhand, Orissa and West Bengal), it was decided by centre government to implement a diesel subsidy during kharif (in 2010) to save standing crops in the field. Same pattern should be followed in states where this problem occurs.

Government should keep aside its motive to please voters or strengthen the vote bank. It should frame a rational policy in which small size category farmers, who are not actual beneficiaries of subsidies, could get more and subsides, and which they do not want should be withdrawn.

Subsidies should be given to those who actually need it, like small and medium size category farmers. Subsidies, which they do not need, should be withdrawn but in a phased manner. On the other hand, instead of subsidies, the government should focus on just three things - electricity generation, infrastructural development and water supply. The accompanying development will take care of the rest. The subsidies should be replaced with constructive schemes that empower people and give them that one push they need to get out of poverty. 

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