Agricultural Subsidy in India

Agricultural Subsidy in India

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A farm or, an agricultural subsidy is a government financial assistance granted to suppliers of raw materials, farmers and owners of agribusiness. Farm subsidies assist Indian farmers achieve the greatest prices for their commodities while also increasing agricultural production. It efficiently aids in the management of agricultural product demand and supply. According to a poll, the government subsidy increases farmers' per-hectare revenue by about 21%. Farm subsidies are distributed to farmers in two ways: directly or indirectly. Direct subsidies often relate to monetary help supplied by the government to farmers, whereas indirect subsidies refer to non-cash benefits offered by the government, such as fertiliser rate concessions, interest rate relaxation on crop loans, and so on.

What is the purpose of Farm Subsidies? - India is an agricultural country, with agriculture employing more than 70% of the people. Furthermore, this industry contributes significantly to the Indian economy. Thus, the expansion of the agriculture sector is critical for both Indian residents and the Indian economy. It is one of the primary reasons why the Government of India (GOI) is attempting to improve India's agriculture industry through direct and indirect subsidies. Farm subsidies not only give farmers with more revenue, but they also motivate them to boost agricultural productivity. In addition, indirect subsidies in agricultural sectors offer additional job possibilities. Crop and fertiliser subsidies assist farmers improve crop quality and output. Agricultural Subsidies Come in a Variety of Forms

Direct Subsidy - is a type of subsidy supplied by the government to farmers in the form of cash, whereas an indirect subsidy is offered through discounts on other agricultural purchases such as crops and fertilisers. Direct subsidies are most commonly seen in the Farm Loan Waiver Scheme, the PM Kisan Scheme, and so on.

Explicit Input Subsidy - is granted to farmers for the purchase of agricultural items such as crops and fertilisers. This type of subsidy is given to small and marginal farmers who cannot afford to buy crops and fertilisers on their own.

Implicit Input Subsidy - does not directly benefit farmers financially, but rather through reducing their additional expenses. Such as offering power bill subsidies and lowering bank loan interest rates.

Output subsidy - This type of subsidy enables the government's restricted trade regulations to give farmers with a fair price for their products while preventing traders from imposing arbitrary prices.