Supporters of farm subsidies have argued that
such programs stabilize agricultural commodity markets, aid low-income farmers, raise unduly low returns to farm investments, aid rural development, compensate for monopoly in farm input supply and farm marketing industries, help ensure national food security, offset farm
…
What are the main arguments in favor of subsidy?
Arguments in favour of Subsidy : It
encourages farmers to adopt intensive cultivation which ensures increase in food grain Production
. The number of small and marginal farmers in a country is large who are unable to buy high price inputs. therefore subsidy on inputs is necessery.
What are three arguments against agricultural subsidies?
- Unfair Redistribution. Farm programs take from average taxpayers and give to higher‐income farm households, which is a reverse Robin Hood scheme. …
- Economic Distortions. …
- Environmental Damage. …
- Farming Not Unique. …
- Farming Would Thrive Without Subsidies. …
- More.
Why are agricultural subsidies good?
Subsidies
protect the nation’s food supply
. Farms are susceptible to pathogens, diseases, and weather. Subsidies help farmers weather commodities’ price changes. Farmers rely on loans, making their business a bit of a gamble.
What are the main arguments in Favour of subsidy Class 12?
1)
Its very important for the marginal and landless farmers
. 2) It convinces the farmers to adopt the modern techniques. 3) It reduces rural inequality and facilitate farmers to undertake risks.
What are the arguments against subsidy?
If the subsidies were to be withdrawn,
the prices of products would rise as their production cost would go up
. But their higher prices would affect their sale. Reduced application of inputs in cultivation would lower agricultural production, particularly food production, and compels the country to import food products.
What are the disadvantages of subsidies?
- Product Shortages. When the government subsidizes a particular product, it causes the price to go down and consumption to go up. …
- Difficult to Measure Success. …
- Inefficient Transfer to Recipients. …
- Higher Taxes.
Is subsidy good or bad?
Most economists consider a
subsidy a failure if it fails to improve the overall economy
. Policymakers, however, might still consider it a success if it helps achieve a different objective. Most subsidies are long-term failures in the economic sense, but still achieve cultural or political goals.
Is a cut in subsidies always good for the economy?
(Q6) ‘ A cut in subsidies puts the government in a dilemma ”. Comment. Ans:
Yes
, because if the government reduces subsidies it will affect the poor class , the farmers i.e., the common man. But if it does not do so, the rich class also benefits and puts enormous strain on the limited government resources.
What are examples of subsidies?
Examples of Subsidies. Subsidies are a payment from government to private entities, usually to ensure firms stay in business and protect jobs. Examples include
agriculture, electric cars, green energy, oil and gas, green energy, transport, and welfare payments
.
Who benefits from agricultural subsidies?
So if economists are right,
and land owners
primarily reap the benefits of farm subsidies, only about 60 percent of subsidy dollars benefit farmers. The rest get passed through to landlords—who do not farm—through higher rental rates and land values.
Should agricultural subsidies be stopped?
Agricultural subsidies should not be stopped
but it should be done in an efficient manner so that the needed farmers or poor farmers who are not financially stable can get these facilities and their situation can be improved. … Improvement in the agricultural sector is one step towards the development of our country.
Why agricultural subsidies are bad?
Farm subsidies are costly to taxpayers, but they also harm the economy and the environment. Subsidies
discourage farmers from innovating
, cutting costs, diversifying their land use, and taking other actions needed to prosper in the competitive economy.
Why do subsidies encourage farmers to use new technology?
Subsidy in agriculture means
providing some important inputs to farmers at a concessional rate that is much lower than its market rate
. During 1960s, in order to adopt new technology. HYV seeds and use of modern fertilizers and insecticides, farmers were provided inputs at a subsidised rate.
What are the advantages of subsidies?
Though one of the advantages of subsidies is
the greater supply of goods
, a shortage of supply can also occur. This is because lowered prices can lead to a sudden rise in demand that many producers may find very hard to meet. Ultimately, it can lead to very high demand that causes an increase in prices.
Why do farmers need subsidies and what are its purposes?
The purpose of farm subsidies is
to average out these fluctuations
. They ensure that during a high-output year, farmers remain in business, so that even during a low-output year, there’s still enough food to go around, and year-to-year variations in prices are kept within reasonable limits.
