Demerits

♤ It takes away incentives from other areas, such as Indian agriculture has become cereal centric, regionally biased, and input intensive. Indirect subsidies are one of the main reason towards such a state.

♤ Farmers do not feel the incentive to save resources such as over exploitation of ground

water, indiscriminate use of fertilizers, etc. are resulting due to it.

♤ Indirect subsidies are not successful in reaching the target beneficiaries because of several lacunas in identification, corruption, lobbying by rich farmers etc.

♤ It is liable for misuse for gaining political mileage especially during time of elections.