Input Subsidies to Agriculture: Case of Subsidies to Fertiliser Industry across Countries

Abstract

The fertiliser industry in developing countries is facing challenge and uncertain future due to their commitments to the WTO. This is part ofthe reason that the developing countries are pushingfor reducing ofsubsidies given by the developed countries to their agriculture which is much bigger making the subsidies to agriculture becoming a contentious issue in the WTOnegotiations. Some ofthe subsidies are accepted in the WTO context whereas the others are not. In India the farm sector subsidies are given in the form of irrigation, electricity, fertilisers etc. Byfar thefertiliser andfood subsidies are the most significant amounting to about US$9.3 billion in 2004 (less than 0.5 percent ofGDP). Thus, whilefrom.the WTO point ofview, it is not necessary to reducefertiliser subsidy in India. However, because ofthe "WIOcommitments, quantitative restrictions in this sector had to be removed by the end ofMarch 2001 in India. Cheaper imports have been threatening the domestic industry specially the units that do not use gas as feedstock. In the short run domestic companies may enjoy the protection ofdifferential subsidy in some form or the other. But in the long run they will have to compete on a stand-alone basis. This paper examines the experience and impact offertiliser subsidy across various countries and shows that it is a common tool to promote farm production. But the evidence shows that the fertiliser subsidy tends . to benefit the rich farmers more than the poorfarmers. The study examines the different approaches used by the policymakers to reach the targetedfarmers. In this context the paper records the evidence from some countries where the fertiliser industry has come forward and complemented the policymakers ' efforts to meet this objective and in the process ensured their betterfuture.

Progress towards sustainable agriculture – Drivers of change

“…In particular, subsidies to the use of variable inputs, such as seeds or fertilizers, may have limited effects on raising productivity if they are not tailored and targeted to those in need (Brooks and Wiggins, 2010). Subsistence farmers may not be reached by input subsidies at all, although the marginal effects on land productivity are potentially highest in their cases (Ashra and Chakravarty, 2007;Lunduka, Ricker-Gilbert and Fisher, 2013). Findings from the PROSA Global Analysis show that at the global level, variable input subsidies coincide with higher food insecurity and have no relationship with fertilizer use.…”

Determinants of family entrepreneurship in the beekeeping sector

“…According to Ashra and Chakravarty (2007), in the developing countries, government interventions are motivated by keeping output prices low for various political and Family entrepreneurship in beekeeping sector distributional considerations, which in turn, necessitates lowering of input prices to make them affordable to a large number of small farmers as well as to encourage the use of modern agricultural practices in order to boost productivity. The Kosovo government continues to help beekeepers with subsidies and grants.…”

Lift Irrigation Schemes in Andhra Pradesh

“…The Act provides for a three-tier body composed of Project Committee, Distributory Committee and Water Users Association. In all three committees, members were to be elected by the water users, which raised gender issues (Arya, 2007;Ashra & Chakravarty, 2007;Buechler & Mekala, 2005;Castro, 2008;Datar & Prakash, 2001;Franks & Cleaver, 2007;Krishnaraj, 2000;Kynch, 1997;Mohapatra & Suar, 2008;Panda, 2007;Reddy & Reddy, 2005;Samal & Dhyani, 2007;Sharma, 2007;Tiwary, 2006Tiwary, , 2009Udayaadithya & Gurtoo, 2012). However, the LIS procedures are quite different from those in canal and tank irrigation systems.…”

“…There is much literature and ongoing research on environment and development (see earlier works by Adams, 1990;Etienne, 1997;Shiva, 1988), including issues of irrigation and related technological strategies across the world, more so for developing countries (Ashra & Chakravarty, 2007;Barnes, 2012;Batterbury, 2001;Caizhen, 2009;Castro, 2008;Gunchinmaa et al, 2011;Kantor & Pain, 2012;Karim, 2006;Mehrotra, 2009;Parfitt, 2009;Perera, 2004;Subba, 1999;Van den Berg et al, 2003;Zubair, 2005). Regarding India (Ackermann, 2012;Bradford et al, 2003;Buechler & Mekala, 2005;Choudhury, 2007;Choudhury et al, 2009;Diwakara, 2006;D'Souza, 2003;Iyengar, 1998;Lalnilawma, 2009;Madsen, 1999;Mishra, 2010;Mohan, 2004;Mudrakartha et al, 2011;Narain & Nischal, 2007;Phadke, 2002;Reddy, 2003;Reddy & Reddy, 2005;Samal & Dhyani, 2007;Tiwary, 2006Tiwary, , 2009, irregular and failed monsoons add much urgency to technological interventions for making water available where it is needed.…”