Disputes over Subsidies to Agriculture

1. Usually, subsidies are made by the government to prevent the decline of industry or to simply encourage the industry to hire more labour. In reference to agriculture, subsidy means the supply of inputs to the farmers at prices lower than the market rates.
2. It is generally agreed that the use of subsidies to provide an incentive for the adoption of the new technology by farmers in general and small farmers, in particular, was necessary.
3. Some economists believed that subsidies should be phased out once the purpose of adopting them has been served, i.e., the technology has been found profitable and has been widely adopted.
4. The subsidies were taken into measure in consideration that they will benefit the farmers but, a substantial amount of fertilizers subsidy also benefits the fertilizer industry.
5. Hence, it is argued that there is no use in continuing the fertilizer subsidies as it is not benefiting the target group, i.e., small farmers, and is creating a huge burden on the government’s finances.
6. On the other hand, some economists believe that the government should continue the agricultural subsidies because most farmers in India are poor, and it will be difficult for them to afford the required inputs without subsidies.
7. Along with this, it is also believed that removing the subsidies will increase the inequality between the rich and the poor farmers, which will further violate the goal of equity. 

Agriculture can be defined as “The art and science of growing plants and other crops and raising animals for food, other human needs, or economic gain”. It came from two Latin words, ‘Ager’, meaning field, farm, land, and ‘Culture’, meaning cultivation. Thus, agriculture is the art or the practice of cultivating soil, producing plants, and raising livestock.

The agricultural practices began thousands of years ago, and it has been a literal part of the Indian economy, both before and after independence. Before 1947, the Indian agriculture sector contributed more than 90% of the total national income of India. Agriculture was the primary source of livelihood in India, as a large portion of the country’s population resided in rural areas. The pre-colonised India was sustainable and self-sufficient even with the production of two crops; namely, rice and wheat.

Due to the invasion of the British government, the Indian economy, especially the agricultural sector suffered a lot and had a downfall. And, on the eve of independence, the most remarkable sector of India was suffering from stagnation and constant degradation.