2.1.4. Food Subsidies

There is an important subsidy linked to the agricultural sector and that is the food subsidy. The twin policy of providing market support to the foodgrains producers and supplying atleast a part of the requirement to consumers at reasonable prices, along with the policy of maintaining a buffer- stock of required quantity for national food security, involves cost in the form of meeting the differences between the economic cost and issue prices of foodgrains. This is what is called the food subsidy and appears explicitly in the Union Budget.