भारत सरकार द्वारा कृषि क्षेत्र में प्रदान किए जाने वाले विभिन्न प्रकार के अनुदानों एवं सहायता की विवेचना कीजिए। विश्व व्यापार संगठन (डब्ल्यू टी ओ) के कृषि समझौते से संबंधित मुद्दों का परीक्षण कीजिए।
Read this question in English
Discuss the different types of subsidies and supports provided by the Government of India to agricultural sector. Examine the related issues pertaining to Agreement on Agriculture of World Trade Organisation (WTO).
🧭 How to think about this question · directive: “discuss / examine”
Decode the demand
- Two directives, two parts: 'discuss the different types of subsidies and supports' asks for a classification with examples; 'examine the related issues' under the WTO Agreement on Agriculture asks for the rules, where India rubs against them, and a view.
- The issue in one line: India supports farmers through inputs, prices and cash, and the AoA sorts each form into a box by how far it distorts trade.
- Three things to answer: the types of support with current numbers; the AoA boxes and limits; the live disputes (reference prices, public stockholding, safeguards, export curbs).
- The trap: listing schemes without linking each to its WTO box, or describing the AoA without India's specific problem. Tie every type of support to its treatment.
Think in a structure
- Open with two budget numbers to show scale, then one line that the AoA judges support by distortion, not by size.
- Types as a table (type, instruments, AoA box) so the two halves of the question meet in one visual; then one-line points with verified outlays as sub-points.
- WTO issues as a timeline of the peace clause, with points on box logic, de minimis, reference prices, SSM and export curbs, each carrying the Article number.
- End positively: concrete moves at the WTO and at home, with a state model, then anchor on the unredeemed 2014 promise of a permanent solution.
Facts checked at source (7)· open
- The 2014 WTO General Council decision keeps public stockholding for food security protected until a permanent solution is agreed.PIB — Exemption for India's food stockholding from WTO subsidy rules ↗“WTO members will not challenge the public stockholding programme of developing Members for food security purposes, in relation to certain obligations under the WTO Agreement on Agriculture, will remain in place in perpetuity”
- WTO Agreement on Agriculture, Article 6.4(b): the de minimis percentage for developing country Members is 10 per cent.WTO — Agreement on Agriculture, Article 6 (Domestic Support Commitments), paragraph 4 ↗“For developing country Members, the de minimis percentage under this paragraph shall be 10 per cent.”
- WTO Agreement on Agriculture, Article 6.2: investment subsidies generally available to agriculture and input subsidies to low-income or resource-poor producers in developing countries are exempt from reduction commitments.WTO — Agreement on Agriculture, Article 6, paragraph 2 ↗“investment subsidies which are generally available to agriculture in developing country Members and agricultural input subsidies generally available to low-income or resource-poor producers in developing country Members shall be exempt from domestic support reduction commitments”
- Budget 2026-27, Outlay on Major Schemes: urea subsidy ₹1,17,879 crore (actuals 2024-25), ₹1,18,900 crore (BE 2025-26), ₹1,26,475 crore (RE 2025-26) and ₹1,16,805 crore (BE 2026-27).Union Budget 2026-27, Budget at a Glance: Outlay on Major Schemes (columns Actuals 2024-25, BE 2025-26, RE 2025-26, BE 2026-27) ↗“55 Urea Subsidy 117879 118900 126475 116805 56”
- Budget 2026-27, Outlay on Major Schemes: PM-KISAN ₹66,121 crore (actuals 2024-25) and ₹63,500 crore in BE 2025-26, RE 2025-26 and BE 2026-27; PM-AASHA ₹7,200 crore in BE 2026-27.Union Budget 2026-27, Budget at a Glance: Outlay on Major Schemes (PM-AASHA and PM-KISAN rows) ↗“49 Pradhan Mantri Kisan Samman Nidhi (PM- Kisan) 66121 63500 63500 63500”
- PIB backgrounder (August 2025): since 2019, ₹3.69 lakh crore has been transferred to farmers through 19 PM-KISAN instalments; the 20th instalment added about ₹20,500 crore by DBT.PIB backgrounder — PM-KISAN 20th instalment (August 2025) ↗“Since the launch of the scheme in 2019, ₹3.69 lakh crore has been transferred to farmers’ accounts through 19 instalments.”
- AoA Annex 2 (Green Box) requires exempt domestic support measures to have no, or at most minimal, trade-distorting effects or effects on production.WTO — Agreement on Agriculture, Annex 2: Domestic Support, the Basis for Exemption from the Reduction Commitments ↗“no, or at most minimal, trade-distorting effects or effects on production”
Question: UPSC's CS (Main) 2026, GS Paper III — paper ↗. Guidance: Minimalist IAS, checked 8 Nov 2026 (how we verify). ·
Model answer· 642words · Minimalist IAS
Indian farm support runs from cheap inputs to price guarantees and cash transfers: the urea subsidy alone is ₹1,26,475 crore in RE 2025-26 and PM-KISAN ₹63,500 crore in BE 2026-27 (Budget 2026-27). The WTO Agreement on Agriculture (AoA) sorts such support into boxes by how far it distorts trade, and that is where India's choices meet the rulebook.
Types of subsidies and support to agriculture
| Type | Instruments | AoA treatment |
|---|---|---|
| Input | Urea and Nutrient Based Subsidy, power, canal water, seeds | Amber; Article 6.2 exempts resource-poor farmers |
| Credit and risk | Kisan Credit Card, interest subvention, PM Fasal Bima Yojana | Amber or Green by design |
| Price | MSP with procurement, PM-AASHA, food subsidy via PDS | Amber market price support |
| Income and services | PM-KISAN, research, extension, irrigation investment | Green |
- Input subsidies: cheapen fertiliser, power and water for every farmer; the largest head, but they skew nutrient use and strain groundwater.
- Urea subsidy rose from ₹1,17,879 crore actual in 2024-25 to ₹1,26,475 crore in RE 2025-26 (Budget 2026-27).
- Credit and risk support: interest subvention on KCC loans and premium subsidy under PM Fasal Bima Yojana lower the cost of borrowing and of crop failure.
- Price support: MSP backed by open-ended procurement of rice and wheat; PM-AASHA extends assurance to pulses and oilseeds; the food subsidy funds the PDS.
- PM-AASHA outlay: ₹7,200 crore in BE 2026-27 (Budget 2026-27).
- Income support: PM-KISAN pays ₹6,000 a year directly into bank accounts, a decoupled transfer tied neither to output nor to prices.
- ₹3.69 lakh crore transferred through 19 instalments since 2019 (PIB, August 2025).
- Investment and services: irrigation under PM Krishi Sinchayee Yojana, research, extension and the Agriculture Infrastructure Fund build capacity rather than pay for output.
Issues under the WTO Agreement on Agriculture
- Box logic: Green Box support is unlimited only if it barely distorts trade; Amber Box support is capped by de minimis.
- AoA Annex 2 requires exempt measures to have "no, or at most minimal, trade-distorting effects or effects on production".
- De minimis ceiling: Article 6.4 caps product-specific Amber support at 10% of a crop's production value for developing countries; Article 6.2 exempts input and investment subsidies to low-income, resource-poor producers.
- Reference-price problem: market price support is measured against fixed 1986-88 external reference prices, so inflation alone pushes India's notified rice support past 10%; India invoked the Bali peace clause for rice.
- Public stockholding: procurement at MSP for the PDS counts as trade-distorting even when the grain never leaves India; only an interim shield protects it.
- 2013: Bali peace clause
- 2014: General Council decision, shield in perpetuity until a permanent solution
- 2015: Nairobi reaffirmation
- Today: permanent solution still pending
- Import surges without a shield: India has no Special Safeguard Mechanism; the G-33 proposal it leads remains unagreed.
- Export restrictions: curbs on rice and wheat invite scrutiny because the AoA asks exporters to weigh importers' food security.
- Asymmetry: developed countries moved large support into the Green Box and keep high per-farmer entitlements, while India's per-farmer support stays small.
Way forward
- Secure the permanent solution: press at the next Ministerial to place public stockholding outside Amber Box limits, with an updated reference-price base.
- Shift from price to income and investment: decoupled per-farmer transfers and irrigation spending sit in the Green Box and do not distort cropping.
- Telangana's Rythu Bandhu and Odisha's KALIA show decoupled state-level transfers already working.
- Diversify procurement: extend MSP assurance to pulses, oilseeds and millets through PM-AASHA, easing the rice-wheat and groundwater lock-in in Punjab and Haryana.
- Reform fertiliser subsidy: pay per farmer rather than per bag, so the Article 6.2 resource-poor exemption is clearly earned and notifications are filed on time.
India must defend its food-security space at the WTO while moving its own support towards less distorting income- and investment-based forms, so that the farmer's safety net and the trade rulebook pull in the same direction once the 2014 promise of a permanent solution is redeemed.
Prepared by Minimalist IAS to the answer standard of Shivam Singh (mentor, 7 years) · facts checked against official sources (how we verify) · updated 8 Nov 2026. UPSC publishes no model answers: compare your structure and coverage with this, then write your own.
