A news report states"Soon, the state's agriculture department will provide direct cash subsidy to farmers through its various schemes. The major schemes will be supply of micro-nutrients on which the farmers get 75 per cent subsidy. Subsidy of 50 per cent is also provided on different pesticides. Another major subsidy given by the agriculture department is on various types of seeds. The department also provides subsidy of 50 per cent on various agricultural implements such as cultivator, harrow, leveller, thresher, sowing cap, fan, etc. Subsidy of ? 45000 is also provided on the purchase of tractors to small and marginal farmers."
Why do the State Governments give so many subsidies to the farmers? Is there not a better method for solving the farmers' problems?
Ans. Subsidies are given to farmers due to wide fluctuation in crop prices, due to which the farmers often suffer losses. Most of them cannot afford the cosdy modern inputs required for high output and so State Governments subsidise these inputs.
Farmers’ problems can be solved by other means like procurement of crops at the Minimum Support Price (MSP) on time (there should be no delay in procurement), guidance to farmers on how best to market their produce, giving help in availing many other facilities provided by the government (not subsidies), for insuring themselves and their crops, advising farmers what crops to grow to maximise their profit and similar other measures.