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‘While subsidies encourage farmers to use new technology, they are a huge burden
on government finances.’ Discuss the usefulness of subsidies in the light of this fact.

Asked by sntshtrk530 4th September 2017, 4:52 AM
Answered by Expert

It has been rightly said that subsidies encourage farmers to use new technology but they are also a huge burden on government finances.  

Points for usefulness of subsidies:

  1. Subsidies help in encouraging farmers to use new and innovative technology.
  2. In India, more than 50% of the farmers are very poor and cannot afford new technology in their farming activity. In this regard, the government can help them by providing subsidies.
  3. The abolishment of subsidy will violate the goal of equity because it raises differences between poor and rich farmers in India.
  4. The application of new technology in farming will increase the total output of agricultural products in developing nations.

 Points against subsidies:

  1.  Some economists are of the view that once technology is widely accepted, the government should stop providing goods at subsidised rates.
  2.   Subsidies are provided to benefit farmers, but it has been observed that the fertiliser industry has benefited more than farmers.
  3.   Also, farmers from prosperous regions benefited from subsidies more than farmers from poor areas.


Answered by Expert 4th September 2017, 8:45 AM
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