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7) Farm support policies and subsidies provided by rich nations to their farmers distort farm produce prices globally and also cause environmental hazards. Analyze in the light of effects of these subsidies on countries like India.

Topic:Issues related to direct and indirect farm subsidies and minimum support prices ; 

7) Farm support policies and subsidies provided by rich nations to their farmers distort farm produce prices globally and also cause environmental hazards. Analyze in the light of effects of these subsidies on countries like India. (250 Words)

EPW

The Hindu BusinessLine

 

Why this question

Developed nations are providing subsidies, which, at times, exceed 200 percent of the production value, despite the 5 percent de-minimis prescribed. This creates huge trade distortions across the world. India and China have raised their concerns about these subsidies. The question is related to GS-3 syllabus under the following heading- Land reforms in India, Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.

Key demand of the question

The question wants us to examine the corpus of subsidies provided by rich nations to their farmers and, find out their effects on countries like India.

Directive word  

Analyze- the question demands an in-depth examination of farm subsidies provided by rich nations and then, describe and briefly explain their price-distortion effects. We also have to describe and explain the environmental hazards caused by these subsidies in countries like India.

Structure of the answer

Introduction- in the introduction you can mention the amount(corpus) of farm subsidies provided by rich countries and how they are discriminatory even while being with the de-minimis range.

Body- Divide the body of the answer into two parts. In one part, briefly discuss in points, about the price-distortion effects of these subsidies and how they are caused.

In the other part, analyze the effects these subsidies have on the environment in countries like India.

Conclusion- in the conclusion part, mention the imperative for India to balance trade liberalization with the need to protect the livelihood of its farmers. you can also mention the formation of a collective front of developing and under-developed countries in WTO to counter the rich nations.