2.3. Issues related to Agriculture Subsidies and their Possible Resolution

1. Heavy Fiscal Burden: The total outgo on fertilizer subsidy alone in 2017-18 was Rs. 70,000 crore.

♤ Possible Resolution: A better targeting of subsidies with the usage of JAM (JanDhan –

AADHAAR- Mobile Number) trinity can reduce the fiscal burden.

2. Excessive use of Ground water: The power subsidy has led to overuse of ground water which has further resulted into dramatic fall in ground water levels. In several villages, wells have gone dry. Water extracted from deep inside earth has shown contamination of Arsenic and other heavy metals.

♤ Possible Resolution: Separate agriculture feeder network (under Deen Dayal Upadhayay Gram Jyoti Yojna). This separate agriculture feeder will supply electricity

only for a few hours a day. The process has shown positive results in arresting decline of ground water levels in Gujarat.

3. Environmental Effects and decline in Soil Fertility: Indiscriminate use of fertilizers (recommended ratio of NPK fertilizer is 4:2:1 while actual usage is 8:3:1. Similarly, urea consumption has increased to 60% in 2017 from 55% in 2010-11) harm the soil fertility, biodiversity, and also leads to eutrophication (increased nutrients in water bodies, eventually leading to decreased oxygen concentration in them) and bio-accumulation/bio- magnification (increasing concentration of toxic material in tissues of living organisms at successively higher levels in a food chain).

♤ Possible Resolution: Creating awareness among farmers, increasing penetration of soil health card scheme, promoting organic farming and innovative products like neem- coated urea will go a long way to check the issue.

4. No benefits to the targeted groups: Fertilizer subsidies are generally cornered by the manufacturers and the rich farmers of Punjab, Haryana and Western UP.

♤ Possible Resolution: Nutrient based subsidy and Neem-Coated Urea has been introduced by Government. There should be Direct Benefit Transfer of fertiliser subsidy through Aadhaar authentication, organic farming should be encouraged and there should be phased increase in the price of urea.

5. Cereal Centric, Regionally Biased, and Input Intensive: Price subsidies has affected Indian agriculture negatively. This has made Indian agriculture cereal centric, and neglectful towards pulses, oil seeds and coarse cereals. This has led to import of these crops and food insecurity in lower strata which depend upon coarse cereals. Also, most of the subsidies go to the rich farmers, and the rich states which are able to grow marketable surplus and have well developed infrastructure.

♤ Possible Resolution: Crop diversification by including more crops under MSP, Mission on Integrated Development of Horticulture, Organic and Cooperative farming, food processing, mixed farming, Direct Benefit Transfer.