Arguments for and against reducing food subsidies

Source: The post arguments for and against reducing food subsidies has been created, based on the article “A case for food subsidies: An investment, not a waste” published in “Indian Express” on 25th October 2024

UPSC Syllabus Topic: GS Paper3- Issues related to direct and indirect farm subsidies and minimum support prices

Context: The article argues for increasing investment in agricultural R&D to improve productivity and food security. It suggests that food subsidies are essential for vulnerable populations and that cuts should come from other areas, not food subsidies.

For detailed information on Research and Development in Agriculture read this article here

What are the arguments for and against reducing food subsidies?

1. Arguments for Reducing Food Subsidies:
2. Redirect Funds to Agricultural R&D: Cutting food subsidies could free resources to boost agricultural R&D, improving crop productivity and addressing climate change. This shift could ensure long-term food security and benefit both farmers and consumers.
3. Alternative Subsidy Options for Farmers: Input subsidies (for electricity, water, fertilizers) create resource inefficiencies, deplete groundwater, and harm soil. Reducing such subsidies might allow more effective funding for R&D rather than supporting inefficient practices.
4. Overestimated Food Subsidy Burden: Critics claim that expanding PDS under the National Food Security Act (NFSA) inflated the subsidy bill. However, coverage increased to 67% of the population, while grain supply per person fell from 7.9 kg to 5 kg, balancing costs.
5. Arguments Against Reducing Food Subsidies:
6. Essential Support for the Poor: Food subsidies act as income transfers for low-income families, saving about Rs. 700-800 monthly for a family of four and enabling spending on other essentials like pulses and milk.
7. COVID-19 Lessons: The pandemic underscored the importance of food subsidies in supporting food security for vulnerable populations.
8. Consumer-Targeted, Not Producer-Focused: Food subsidies primarily benefit consumers, not farmers, making them crucial for broader welfare rather than just agricultural support.

Question for practice:

Examine whether reducing food subsidies to redirect funds towards agricultural R&D would effectively enhance food security and benefit both farmers and consumers in the long term.