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One subsidy per household per season for benefit of marginal farmers: Study

May 23, 2019 05:33 AM


One subsidy per household per season for benefit of marginal farmers: Study
Recommends Discontinuation Of Aid In A Phased Manner To Avoid Fiscal Burden On Govt


A study by the Punjab Agriculture University, Ludhiana, recommends one subsidy per household per season criteria to ensure that small and marginal farmers get an equal chance of receiving benefits and dominance of large farmers in the subsidy programme could be restrained. This step is also expected to lower the repetition of farmers under various subsidies.

Also, agriculture subsidies need to be well targeted to ensure that the disbursement criteria is stringent, based on farmers’ operational land holdings, so that maximum number of small and marginal farmers are covered under it, says the study. All the economists and extension personnel who participated in the study agreed that large farmers with capacity to pay electricity charges in Punjab were getting more benefits from power subsidy than small and marginal farmers were.

Noticing that a key reason for the decline of public investment in agriculture has been ever increasing agricultural subsidies, the study endorses that such benefits (subsidies) on various inputs be discontinued in a phased manner, once they become costeffective to avoid fiscal burden on the government.

“Food and agricultural subsidies are far greater than public investment in agriculture and allied sectors. In addition, there has been deterioration in quality of institutions/organizations providing inputs and services such as credit, seeds, technology, extension, etc.,” reads the study conducted by Anupam Anand and Manmeet Kaur of the department of extension education. It concludes that the investment in public goods such as agricultural research and extension, rural roads and irrigation typically produce far greater returns than spending on input subsidies.

A number of economists and extension personnel reasoned that establishing integrated farming system as the criteria would compel farmers of all sections to adapt and thus facilitate the diversification of agriculture sector at every level. More than two-third of economists and extension personnel favoured subsidy on fertilizers but they also recommended a change in policy to decontrol the subsidy on urea, which would help curb the overuse of urea which is now available at cheaper subsidized rate.

It has also been recommended that the funds allocated for subsidies on machinery should be minimized and channelized towards increasing quantity of other inputs such as seeds, fertilizers and plant protection materials for a wider coverage of small and marginal farmers. The experts also opined that subsidy should be given on micro-irrigation units to promote water conservation and improve the depleting ground water table in Punjab. The study also concluded that there is need for disbursement of subsidies on caste basis to ensure their availability to the weaker sections of those castes.

The study analysis is based on the inputs of 20 economists and 20 extension personnel involved with the subject of agricultural subsidies

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