Tuesday, April 24, 2007

Agriculture - Whose subsidy is more effective?

Still at the Federal Trough: Farm Subsidies for the Rich and Famous Shattered Records in 2001
Although dated - this study is very interesting. US Agriculture subsidies mainly benefit large corporations who proceed to reduce the family farmer to penury. US subsidies depress world prices, so when seen on the global scale, the Indian farmer is the same as the average family farmer in the US.

Is agriculture a question of whose subsidy is more effective? Is it 'economies of scale' in production or is it 'economies of scale' in receipt of government handout?

What should India do to target, consolidate and streamline subsidy payments to make them more effective.
How can Indian farm subsidies be converted from inefficient family farmer subsidization to be efficient large farm subsidization?

Could differential subsidization for cooperatives (greater subsidy for co-operatives with large farm holdings) be the answer?