Hi, welcome to the agricultural subsidy programme, features and their effects.
Table Of Contents
- Agricultural Subsidy Programme
- Features of Agricultural Subsidy Programme
- Effects Of Agricultural Subsidy withdrawal by government
- Revision Questions for Students
Agricultural Subsidy Programme
Agricultural subsidy programme refers to a non-refundable aid granted to a farmer. The agricultural subsidy programme feature is a deliberate government policy aimed at supporting farmers to ensure adequate supply of Farm inputs at reduce prices. Examples are reduction in the prices of Farm inputs such as fertilizers, improved seeds, farm machines and implements and agro-chemicals.
Features Of Agricultural Subsidy
Here are the features of Agricultural Subsidy:
- Agricultural Subsidy is a non refundable aids to farmers.
- Subsidy may be in cash or in kind.
- It includes reduction in prices of inputs like chemicals, seeds and fertilizers.
- It is given and never to be returned.
- Government bears part of the burden of a subsidy.
Effect of Subsidy Withdrawal by Government
The withdrawal of subsidy by government can have lot of negative effects on agricultural production.
Some of such effects are:
- Lower production: The withdrawal of subsidy by government will generally lead to low production because farmers cannot afford to buy farm inputs which are now very high.
- High cost of Farm produce: Farm products which are now produced by farmers are going to be associated with high cost because of high cost of production.
- Reduction in the number of farmers: When subsidy is removed, many farmers may withdraw from the business because they cannot afford to buy Farm inputs which are now very costly.
- Inaccessibility of improved Farm input: Improved Farm inputs like seeds and other planting materials may not turn out to be inaccessible to the Farmers. This will prompt them to start using local and unimproved planting materials that will lead to lower yield.
- Discouragement in agriculture: There will be general discouragement in agriculture as many farmers will now find it difficult to cope with the purchase of Farm inputs at higher prices.
Revision Questions
- What is agricultural subsidy?
- State five features of agricultural subsidy.
- List and explain five effects of subsidy withdrawal by government