I saw this article below in The Hindu (25-12-2011). The entire system of government subsidized Agriculture in India is not only ruining agriculture production in India but also ruining the farmers whom the government purports to help. So why are subsidies not good for agriculture? First of all it depends on what is being subsidized. Let us for eg., take fertilizer subsidies, the government of India and the states want to encourage farmers to use fertilizers to increase production therefore purchases certain amount of fertilizers especially nitrogen ones such as Urea. The government pays the wholesale price and then subsidies the price to farmers. This is all well and good from the governments perspective. However farmers do not know if they need this type of fertilizer for their crop or land as there are not many facilities to the soil test nor is there much awareness. The farmers purchase this fertilizer and apply in what ever amount they can afford to. This will lead to irregular use and patchy use of the fertilizer and in many cases excess use. Nitrogen fertilizers when used excessively either leach out with rain (about 40%) or end up causing diseases in crops such as rice or wheat. Additionally the build up of nitrogen fertilizers causes land to become acidic and degraded over time. the leached nitrogen runs off into water systems and contaminates underground water and rivers and creeks leading to formation of algal blooms in water killing bio diverse water systems.
Governments instead of so called subsidizing fertilizers should help farmers by conducting soil tests for free allowing them to correctly use the right fertilizers at the right time to increase production. Just subsidizing fertilizers is of no use to anyone as it needs monitoring. Nitrogen fertilizers such as Urea are also synthetic fertilizers manufactured using fuels leading to a high carbon foot print as well.
Water subsidization is also not very helpful as it leads to excess use of water indiscriminately and and inefficiently. India should concentrate on subsidizing good irrigation systems such as drip irrigation and fertigation. India should also concentrate on developing good seed production and storage system along with Integrated Pest Management system. India should provide free advice and training to farmers in land care, soil managment, pest and disease control and use of best managment to maintain land for the future. Degradation of land is no good for the country.
Subsidizing agriculture in an untargeted manner is no good to anyone. Farmers need educational help in best management practice and a market based price mechanism. This will stop farmers producing crops excessively just because there is subsidy and lead to proper production based on market demand and supply. This in turn will reduce governments having to purchase grain and produce at an artificial price and having to store it and waste it. Government of India should stop wasting tax payers and people's money on these silly schemes and come to terms with today's market based mechanisms and create more opportunities for increased production through the use of best management practices rather than distort the market with artificial interference and inefficient systems. Over 52% of the employment in India is based in rural areas and agriculture sector contributes over 25% GDP. Much hyped IT sector contributes only 7% GDP. It is high time India made use of currently available tools and developed more IT tools to help farmers. There is a serious potential to increase production efficiently and India needs to feed over 1.5 billion people by 2050.