Agriculture subsidies in Punjab: an analysis

Abstract

The socio - economic structure, which prevailed prior to the British rule in the country, resulted in the organization of self-sufficient villages. It had been maintaining some kind of static equilibrium. The Indian peasant, though not properly educated, had adequate experience of farming systems and he has been dependent on it for the means of living. The Royal commission in Agriculture in India observed that both the methods of cultivation and social organization exhibit that settled order which is characteristic of all countries in which the cultivating peasant has long lived in and closely adapted himself to the conditions of a particular environment. After independence tremendous efforts are made to boost the economy through agriculture as one of the tools for development. Specific programmes like new agriculture technology are introduced to convert agriculture into a successful and prosperous business, to bring more land under cultivation and to raise agriculture production. In India, the adoption of new agricultural technique is costly than that of traditional method of cultivation. In traditional method, inputs are least expensive, on the other hand, inputs in modern technology like high yielding varieties of seeds, fertilizers, farm mechanization and irrigation are very costly and Indian farmers being poor are not in a position to buy these expensive inputs. Then on the recommendations of food grain price committee (Jha Committee), the Government of India started the scheme of subsidies on purchase of various agriculture inputs to facilitate the farmers (Singh, 1994). Now, agriculture subsidies have become a debatable issue in India. All of these subsidies by reducing the prices of the inputs, served in the initial stages of green revolution, as incentives to the farmers for adopting the newly introduced seed-cum-fertilizer technology. These helped in raising the agricultural output, after some time, the amount paid on these subsidies began to rise (Gulati and Narayanan, 2003).