Q. Consider the following statements regarding farm subsidies:
1. The farm subsidies of developed countries are lesser than developing countries.
2. World Bank has put some ceilings on the number of subsidies being provided by the various developing and developed nations.
Which of the statements given above is/are correct?

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

Answer: D
Notes:

Farm subsidies form an integral part of the government’s budget.  

  • In the case of developed countries, the agricultural or farm subsidies compose nearly 40 per cent of the total budgetary outlay, while in India’s case it is much lower (around 7.8 per cent of GDP) and of different nature.  
  • The World Trade Organization (WTO) has put some ceilings on the amount of direct and indirect subsidies being provided by the various developing and developed nations due to the fact that these subsidies distort the free-market forces which have their own implications. 

Source: TMH Ramesh Singh 

Blog
Academy
Community