Agricultural subsidies – for the farm or the farmer?

It is not the farmer who makes the food: he is only a facilitator. Food is actually made by plants. Therefore it is important to understand the requirements of plants and supply them without restrictions in order for plants to deliver food.

The lesson India has to learn is that instead of subsidising food supply to the people, the plants need subsidised food such as fertilizers and other inputs in order for them to produce the food to achieve food security.

This is Dr. Lux Lakshmanan, Director, California Agriculture Consulting Service, Davis, California writing in The Hindu. According to him, the underlying problem with agriculture in India is low productivity. I did find his simple and direct assertion favouring the farm over farmers quite striking – definitely food for thought. The full article is here.

So what is the public policy implication for this? In 2008-09, India’s fertilizer subsidy bill was INR 75,849 crore. A recent report from an IIM Ahmedabad study had suggested that fertilizer subsidies should continue to be routed through the industry rather than as direct transfer to farmers, as is apparently being proposed/debated. Makes sense, in the light of Dr. Lakshmanan’s points.

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