Agriculture accounts for 17.5% of India's GDP and approximately half of total employment (2015-2016). Two-thirds of India's population depends on agriculture and related activities for their livelihood. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get Original Essay The Indian government plays a vital role in the development of the agricultural sector. The role of government is varied and varied. Some of the reasons cited for the vital role are self-sufficiency, job creation, support for small producers to adopt modern technologies and inputs, reducing price instability and improving the income of agricultural families . This vital role can take many forms, for example import-export policies and national policies such as price support programmes, direct payments and input subsidies to influence the cost and availability of agricultural inputs such as credit, fertilisers, seeds, irrigation, water, etc. Being an agriculture-based country, India since independence has tried to improve its agricultural sector by providing subsidies and other forms of measures to improve it. India subsidy is given in two ways: a) fertilizer subsidy is given by the central government and earlier it also provided diesel subsidy but now it stops giving and b) subsidies on irrigation, electricity, seeds, etc. they are provided by the state government. The objectives of subsidies are redistributive effect, intersectoral balance, well-targeted trade effects, etc. In India, agricultural subsidies are of various types. They explain the following: (1) INPUT SUBSIDY: 'Subsidies can be given through the distribution of inputs at prices below the standard market price for these inputs. The size of the subsidies will therefore be equal to the difference between the two prices per unit of distributed input.' Different types of subsidies can be mentioned in this category. They are: (a) Fertilizer Subsidy: “Distribution of low cost chemical or non-chemical fertilizers among farmers. It is equivalent to the difference between the price paid to the fertilizer producer (national or foreign) and the price received by farmers." (b) Irrigation Subsidy: “Subsidies to farmers whom the Government supports for the provision of adequate irrigation facilities. Irrigation subsidy is the difference between the operation and maintenance costs of irrigation infrastructure in the state and the irrigation charges recovered from farmers. This can work through the provision of public goods such as canals, dams which the government builds and charges low or no prices for their use by farmers. It could also be through low-cost private irrigation equipment, such as pump sets.” (c) Energy Subsidy: “Electricity subsidies involve the government charging low rates for electricity supplied to farmers. The energy is mainly used by farmers for irrigation purposes. It is the difference between the cost of generating and distributing electricity to farmers and the price received by farmers. State Electricity Boards (SEBs) either generate the power themselves or purchase it from other producers such as NTPC and other SEBs. The energy subsidy “acts as an incentive for farmers to invest in pump sets, boreholes, etc.” (d) Seed Subsidies: Government can provide high yielding seeds at low prices. The research and development activities required to produce such productive seeds are also undertaken by the government, spending on these is a kind of subsidy givento farmers. (e) Credit Subsidy: “It is the difference between the interest charged to farmers and the actual cost of providing credit, plus other costs such as writing off bad debts. The availability of credit is a major problem for poor farmers. They are short of liquidity and cannot approach the credit market because they do not have the necessary collateral for loans. To carry out manufacturing activities they approach local money lenders. Taking advantage of the helplessness of poor farmers, financiers charge exorbitant interest rates. Many times even farmers who have guarantees cannot take advantage of loans because banking institutions are largely based in cities and often do not engage in agricultural credit operations, which are considered risky." The government can provide the following measures to address these problems: (1) more banking operations in rural areas which will favor agricultural lending, and (2) low interest rates can be maintained by various subsidy schemes, and (3) the conditions Credit can be relaxed for the poor. (2) Price Subsidy: “It is the difference between the price of food grains at which the Food Corporation of India purchases food grains from farmers and the price at which PCI sells them to traders or to the public distribution system. The market price may be so low that farmers will have to bear losses instead of making profits. In this case the government can promise to buy the crop from farmers at a price above the market price. The difference between the two prices represents the unit subsidy given by the government to farmers. The price at which the government buys crops from farmers is called the purchase price. Such government procurement also has a long-term impact. It encourages farmers to grow crops that are regularly procured.” (3) Infrastructure subsidies: “Private efforts in many sectors prove insufficient to improve agricultural production. Goodreads, storage facilities, energy, market information, transportation to ports, etc. they are vital for carrying out production and sales operations. These structures fall within the scope of public goods, the costs of which are enormous and the benefits of which accrue to all farmers in an area. Not a single farmer will come forward to provide these facilities due to their cumbersomeness and the problems inherent in revenue collection (no one can be excluded from the benefit due to non-payment). So the government takes responsibility for providing them and given the plight of Indian farmers, it is possible to charge a lower price from poorer farmers.” (4) Export Subsidies: This type of subsidy is no different from others. But its purpose is different. When a farmer or exporter sells agricultural products in the foreign market, he earns money for himself and foreign exchange for the country. Therefore, agricultural exports are generally encouraged as long as they do not harm the national economy. Subsidies provided to encourage exports are referred to as export subsidies.” Some of the subsidy policies are: 1.Nutrient Based Subsidy, 2010 2.New Policy on Seed Development (NPSD) includes hybrid seeds, genetically modified varieties, national seed companies. 3. Irrigation Policies 4. Energy and Electricity Policies 1. Nutrient-Based Subsidy, 2010: “It was introduced in 2010 with the aim of promoting balanced use of fertilizers and limiting government subsidies on fertilizers. The idea was to fix the subsidy based on the nutrients (in per Kg) in the fertilizer and leave the pricing to the suppliers. CurrentlyUrea is not covered by the scheme due to political constraints. As a result, the subsidized price of urea remained stagnant even when real production costs increased significantly. On the other hand, potassium and phosphorus are covered under the program and suppliers are given a fixed subsidy based on the nutrient content and they change the maximum retail price based on market signals. Secondary and micronutrients are also covered by the program”. “As a result, the actual use of NPK is in a ratio of approximately 8:3:1, while the recommended use is 4:2:1. This additional use of urea offers no additional benefit to the farmer. Instead, this can degrade the soil and damage the crop. The productivity and quality of a crop depend on the use of a diverse mix of macro and micronutrients, which vary from soil to soil. The latest economic survey finds that while urea consumption increased from 59% to 66% of total consumption in 2012-13 compared to 2010-11, fertilizer consumption per hectare fell from 140kg to 128kg over the same period . The fertilizer subsidy was 67,971 million in 2013-2014, an increase of 11% compared to 2009-2010. Much of this went to the production and consumption of urea which was not needed at all. Furthermore, due to excessive use of fertilizers, groundwater is also being polluted and the problem of accumulation of chemical and biological substances is affecting people's health. In Punjab and Haryana the problem is rampant and groundwater is polluted by arsenic, uranium, fluoride, etc. Plants or crops need around 17 essential elements to survive and grow. If any of these elements are deficient, growth will be stunted or the plant will die. Among these elements, N, P, calcium, magnesium and sulfur are needed in relatively large quantities and defined as macronutrients. Other elements such as boron, chlorine, copper, iron, manganese, molybdenum, zinc and nickel are needed in smaller quantities, therefore called micronutrients. Macronutrient fertilizers are dominant and their use improves the ability of plants to extract more micronutrients from the soil." 2.New Policy on Seed Development (NPSD): “Input subsidies have their roots in the green revolution. At the time, extensive subsidies were given for hybrid seeds, fertilizers, pesticides, etc. The main objectives of the subsidies are two: the first is to keep the cost of cereals to a minimum and avoid food inflation, the second is to guarantee the security of the farmer's income. Although this policy has contributed a lot to ensuring food sufficiency, it has many unintended negative impacts. This results in overuse of inputs as input costs do not represent adequate market costs and farmers are unable to respond to market signals. They continue to use a distorted mix of inputs as the costs are borne by the government.” Seeds: “Many schemes like Rashtriya Krishi VikasYojna, Macro Management Agriculture, Integrated Scheme for Oilseeds, Pulses, Oil Palm and Maize (ISOPOM); The technological missions for cotton, the national mission for food security etc. provide subsidized seeds. Some of them also provide incentives for investments in seed production infrastructure and improvements.” The New Policy on Seed Development (NPSD) provides the option of allowing 100% Foreign Direct Investment (FDI) under the automatic route. The goal is also to create a seed bank. There are three stages in the seed production cycle. In the first phase, Breeder seeds are developed by the Indian Council of AgriculturalResearch (ICAR), fromNational Seeds Corporation or state farms. In the second phase Foundation Seeds are developed by NSC, SFC or state seed companies and finally certified seeds are produced and distributed to all farmers. Certification is carried out by state agricultural universities or private organizations authorized by the Indian Council of Agricultural Research'' Hybrid seeds: “Hybrid seeds are obtained by cross-pollination of different varieties of related plants. These seeds were instrumental in the green revolution. These seeds combine the desirable properties of two related plants. Using a controlled breeding method devised by Charles Darwin and Gregor Mendel in the mid-19th century, plant breeders can now produce seeds that combine the desired traits of two pure parental lines in the first generation itself. One disadvantage was that these seeds did not regenerate seeds of the same quality. So every time farmers have to buy new seeds. In the case of conventional seeds, farmers could use seeds reproduced from the current crop. In this sense, hybrid seeds have increased production costs for farmers and multinationals such as Cargill Inc. have established their monopoly on the market. Now the outcry is growing both for and against a variety of genetically modified seeds. Its supporters believe it can free the world from hunger, while its opponents fear negative effects on the environment, biodiversity and health." Genetically modified varieties: “These seed varieties are developed in laboratories using genetic engineering technologies. In these technologies, genes from different species of organisms (such as genes from bacteria with plants) are integrated to modify DNA to achieve the desired characteristic. The bacterium called Bacillus thuringiens is given a gene which is incorporated into the DNA of the plant and we get genetically modified organisms like BT maize, BT cotton, Bt brinjal etc. This plant will be protected from pests and give higher yields. In the USA, GMO crops are allowed and contribute approximately 85% of consumption, while in Europe they are now largely banned. In India, commercial cotton production is permitted and field trials are underway for food crops. In 2013, the Supreme Court in response to a PIL appointed a committee of technical experts to consider whether the trials should be allowed or not. The EC has recommended that there be a moratorium on trials until adequate regulatory and safety mechanisms are in place and BT crops are approved for their long-term safety. Nonetheless, this government has allowed the testing of some crops, as it has not issued any ordinance in this regard. The farming community's main concern is that companies like Monsanto will exploit their monopolies because seeds are expensive and non-regenerative. Recently, GMO cotton seeds supplied by Mahyco, (a GMO seed company that has a joint venture with Monsanto), caused a crop failure that caused farmers to suffer. National Seeds Corporation: is a Miniratna company of the Ministry of Agriculture established in 1963 to produce basic seeds and undertake certification activities. It plays a central role in the development of the seed industry in India. Various programs such as ISOPOM, NFSM and National Horticulture Mission are implemented (partially or fully) under the NSC. It is also involved in seed exports, particularly to SAARC nations and African countries. A SAARC seed bank is maintained where large quantities of various seeds are kept as inventory so that shortage due to any calamity can be addressednatural or otherwise. 3. Energy and water for agriculture: “Farmers receive highly subsidized or free electricity for agricultural purposes. Electricity is mainly consumed to pump underground water. Since agricultural land is rain-fed in 70% of countries, electricity becomes the main input into agricultural products. However, subsidized and abundant electricity has led to the indiscriminate use of electricity by farmers, resulting in massive waste of electricity and water. In fact, this is the main reason for groundwater depletion. It also provides avenues for electricity theft and theft.” Power Supply Separation: “The power supply is an electrical cable or group of electrical conductors that carries power from a 'larger central source' to one or more secondary distribution centers or branch circuits (to the end user). We have still common supply lines for agriculture and other sectors in all states except Gujrat.” “Jyotigram Yojna was started in Gujrat in 2006, which separated agricultural feeders from the main feeder. The agricultural feeder supply has been regulated and the power is supplied only for 8-10 hours per day. The times of powers are pre-declared to the farmers. On the main feeder the power is supplied full time it has a dual advantage; it is the surplus of electricity for industry and civilians and the second is the rapid depletion of groundwater. Gujrat has a surplus of power of 2000 MW which is sold to other states. The success of this scheme was recognized by the planning commission and was made central to energy reforms under the Twelfth Five Year Plan. The new Pandit Deendayal Upadhyaya Gram Jyoti Yojana scheme aims at unbundling of feeders at the national level. Rajasthan and Andhra Pradesh are the first states to be launched. The scheme will be merged with the 'Integrated Power Development Scheme', the aim of which is to improve India's subtransmission and distribution network. Irrigation: “Although India is the second irrigated country in the world after China, only a third of the cultivated area is irrigated. Irrigation is the most important agricultural input in a tropical monsoon country like India, where rainfall is uncertain, unreliable and erratic. India will not achieve sustained progress in the agricultural sector unless and until more than half of the cultivated area comes under guaranteed irrigation. This is witnessed by the success story of agricultural progress in Punjab, Haryana and western Uttar Pradesh, where more than half of the cultivated area is irrigated. Large tracts still await irrigation to increase agricultural production. However, care must be taken to safeguard against the negative effects of excessive irrigation, especially in canal-irrigated areas. Large tracts in Punjab and Haryana have been rendered unusable (areas affected by salinity, alkalinity and waterlogging), due to faulty irrigation. In the Indira Gandhi Canal command area, intensive irrigation has also led to a sharp increase in subsoil water levels, resulting in water logging, soil salinity and alkalinity.” 4. Inter-Basin Water Transfers: “One of the most effective ways to increase irrigation potential to increase food grain production, mitigate floods and droughts, and reduce regional imbalance in water availability is Inter Basin Water Transfer ( IBWT) from the surplus rivers to the deficit areas. The Brahmaputra and the Ganges, particularly their northern tributaries, Mahanadi, Godavari and the west-flowing rivers from the Ghats..