Discuss the different types of subsidies and supports provided by the Government of India to agricultural sector. Examine the…

Types of Subsidies and Support

• Input: Nutrient Based Subsidy for fertilisers, and power and irrigation subsidies that cut pumping and water costs.
• Price: Minimum Support Price (MSP) procurement through the FCI and the PM-AASHA umbrella, with public stockholding of notified crops.
• Income: PM-KISAN gives ₹6,000 a year to landholding farmers.
• Credit and risk: Interest subvention on Kisan Credit Card loans, premium subsidy under PM Fasal Bima Yojana, and the Agriculture Infrastructure Fund for post-harvest investment.

WTO Agreement on Agriculture (AoA)

The AoA classifies domestic support into the Amber Box (trade-distorting), Blue Box (payments under production-limiting programmes) and Green Box (minimally distorting, such as research, extension and decoupled income support). Developing countries have a 10% de minimis ceiling, product-specific and non-product-specific.

Related Issues

• Measurement: Market price support is calculated against a fixed 1986–88 external reference price that ignores inflation, so India's MSP procurement of rice can appear to breach the 10% ceiling; with no Bound AMS, India has no other Amber Box room.
• Peace Clause: The 2013 Bali decision, made open-ended in 2014 until a permanent solution, bars challenges to such breaches for traditional staples held for food security; India has invoked it for rice since 2018–19.
• Asymmetry: Input subsidies to low-income or resource-poor farmers are exempt under Article 6.2, but developed countries shift large payments into Green and Blue Boxes and keep large Amber Box entitlements.
• Export restrictions: Exporters question curbs such as India's rice restrictions of 2022–24.

With MC13 (2024) and MC14 (Yaoundé, 2026) failing to agree a permanent solution, India, with the G-33, continues to press for one while balancing fiscal costs, farm incomes and food security.