Discuss the different types of subsidies and supports provided by the Government of India to agricultural sector. Examine the related issues pertaining to Agreement on Agriculture of World Trade Organisation (WTO).

Distortions caused by Subsidy regime →

[A] Direct Subsidies →

1. Poor targeting of beneficiaries → only 60% covered in PM KISAN.
2. Sharecroppers do not get amount/inclusion
3. Megre amount → 6000 Rs not enough.
4. Lack of more direct subsidy options for farmers.

[B] Indirect subsidies

1. Huge expenditure on state exchequer
2. Distorts Nutrition balance → 8:4:1 of NPK instead of 4:2:1 ratio due to cheap urea.
3. Pollution, ground water leaching, soil degradation.
4. MSP → distorts markets → Cereal centric cultivation, only 6% benefited (Shanta Kumar)
5. Farmer's procurement → open ended → leads to wastage, black marketing
6. Power subsidies → DISCOM's poor health and over exploited ground water.

Reforms Needed

1. Replacing MSP regime → market distortion ↳ Price deficiency payment scheme (Niti Ayog) ↳ MP's - Bhavantar Bhugtan Yojana.

2. Solar as 3rd crop → (Ashok Gulati) to reduce power subsidies.

3. Use Nano-Urea, organic fertilizers (PM-PRANAM scheme) to reduce chemical use.

4. Micro irrigation and fertigation for proper fertilizer use.

5. More direct subsidies (India only 2$ vs USA - 105$)

6. Better targeting, JAM trinity used.

7. Private sector in Agriculture (3 Bills back)

8. Utilizing → Cooperatives, FPO's for good management practices.

9. Market mechanism for crop pricing and amending Mandi system (APMC).

10. E-NAM, integrated mandis.

11. Commodity derivatives for price market share.