← All questionsGS3 · 2013 · Agriculture ·Agricultural Subsidies and Distortions
QUESTION 5
GS3
10 marks

What are the different types of agricultural subsidies given to farmers at national and state levels? Critically analyse the agricultural subsidy regime with reference to distortions created by it.

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7 min
200 words

What the examiner wants

Classify farm subsidies at central and state levels and analyse distortions they create.

Critically analyseBreak it into parts, test each against evidence, and give a reasoned verdict.

Demand-wise check

  1. 1Central: fertiliser (urea and Nutrient Based Subsidy), MSP procurement, interest subvention, crop insurance, PM-KISAN≈35 words
  2. 2State: free or cheap power, canal water below cost, seed subsidy, loan waivers≈35 words
  3. 3Distortions: urea overuse and NPK imbalance, groundwater depletion from free power, paddy-wheat monoculture, regional and large-farmer bias, fiscal strain≈35 words
  4. 4WTO angle: amber vs green box; reform towards direct income support and investment≈35 words

Open in about 30 words and close in about 30.

Answer plan

Types (table)BenefitsDistortions with examplesWTO contextReforms

Where marks usually go

  • Not separating central and state subsidies as asked
  • Listing subsidies without the distortion analysis

Draw this

  • Table: subsidy, level, intended goal, distortion

Value addition

  • WTOArticle 6.2 of the Agreement on Agriculture exempts input subsidies to low-income or resource-poor farmers in developing countries.WTO AoA
  • PolicyNutrient Based Subsidy (2010) decontrolled P and K fertilisers while urea stayed price-controlled, worsening imbalance.Department of Fertilizers, 2010

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