17 February 2010

Farming..the cost of subsidies

Excellent article in the Mint 'Farming is dead; long live subsidies' about farming in India and the skewed production processes, thanks to fertilizer subsidies, political pressures and pricing policies.

The costs, of course, are staggering. Food and fertilizers subsidies alone accounted for Rs1.02 trillion. As for the ecological costs, they simply cannot be calculated.
“Our land had 24 elements/micronutrients when intensive cultivation (had) begun in 1962-63. There was shortage of only one or two such elements. Today, excessive subsidization of chemical fertilizers has ensured that very few farmers use natural fertilizers. The result is that in many parts of Punjab, soil is deficient in as many as 16 micronutrients. You can see the ecological costs for yourself,” says Sucha Singh Gill, an agricultural economist and former professor of economics at Punjabi University in Patiala.


  1. will GM crops help better growth in poorer soils.?..:)

  2. The jury is out on that one, Suvrat!
    Meanwhile, the government is moving to a nutrient based subsidy scheme from the current product based system
    http://www.indianexpress.com/news/smart-fertiliser-subsidy-signals-bold-farm-reform/581676/0..excerpt below:
    ....the government provides subsidy (the difference between the cost of production and the controlled sale price) only on 15 fertiliser products — urea, muriate of potash, diammonium phosphate, single super phosphate and 11 other complexes with defined phosphorous (P), nitrogen (N) and potassium (K) content.
    Companies find it viable to market only these 15 products, stifling innovation and leaving no choice for farmers. So even though there are better fertilisers than urea with N content, urea is the most preferred fertiliser in India because its sale price is fixed at Rs 4,830 a tonne.