Skewed subsidies make paddy most profitable
Massive subsidies for growers of paddy, a water-guzzling cereal that has ecologically ruined Punjab and Haryana, along with state-guaranteed purchases,have made it the most profitable crop in the country, the reason why farmers don’t want to shift to scarce items such as pulses, a new study has said. However, given that subsidies are heavily skewed towards rice, it will be difficult to push dedicated paddy farmers to diversify towards other crops unless “agricultural subsidies are re-purposed”, the study by the New Delhi-based think-tank, the Indian Council for Research on International Economic Relations, said. The combined subsidies for paddy from the Centre and the state government in Punjab for power, seeds, fertilizer and irrigation amounted to a staggering ₹38,973 per hectare during 2023-24, the highest for any crop. The authors do not recommend eliminating rice subsidies but suggested upfront incentives of ₹30,000-40,000 per hectare for non-paddy farmers by re-purposing power and fertilizer subsidy to alternate kharif or summer crops.
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