Question

“As per a few scholars, fertilizer subsidies should now be phased out, as they have served their purpose.”

Do you agree with the given statement ? Justify your answer with valid arguments.

Hint:

Agree and justify: part of the subsidy goes to the fertiliser industry, prosperous regions gain most, and it is a heavy fiscal burden. Targeted support would be better.

Answer 1

Step 1: Take a stand:
Yes, I agree with the statement.
A subsidy is meant to help farmers buy fertilisers at a lower price. We should therefore check whether it reaches the intended people and whether it is worth the cost.

Step 2: Argument 1: Benefits go to the fertiliser industry:
A large part of the fertiliser subsidy is not kept by farmers.
It benefits the fertiliser industry, which gets support for its own costs.
So the aim of helping the farmer is only partly met.

Step 3: Argument 2: Benefits go to prosperous regions:
Among farmers, the subsidy mostly helps those in the more prosperous regions, which use more fertiliser.
Poorer regions and small farmers get much less.
This limits the effectiveness of the subsidy in reaching the intended beneficiaries.

Step 4: Argument 3: Heavy burden on government finances:
Fertiliser subsidies cost the government a huge amount every year.
This fiscal burden reduces the money available for roads, irrigation, health and education.

Step 5: Better alternative:
Phasing out the subsidy and adopting better-targeted support, such as help aimed at needy farmers, would be more efficient and more equitable.

Final Answer:
Yes, fertiliser subsidies should be phased out because a large share goes to the industry and to farmers in prosperous regions, and they put a heavy fiscal burden on the government. Targeted support is a better way to help farmers.