Why were fertilizer subsidies a double-edged policy instrument during 1960–1990?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. They supported productivity but often benefited richer farmers.
They supported productivity but often benefited richer farmers. Fertilizer subsidies in India between 1960 and 1990 played a crucial role in boosting agricultural productivity, especially during the Green Revolution. By making fertilizers affordable, the government encouraged farmers to adopt modern inputs like HYV seeds and irrigation, leading to higher crop yields. However, this policy had unequal impacts. Larger and wealthier farmers, who had better access to land, credit, and irrigation facilities, were able to utilize subsidized fertilizers more effectively. In contrast, small and marginal farmers often lacked these complementary resources, limiting their benefits. As a result, while subsidies increased overall production, they also widened income disparities in rural areas, making them a double-edged policy instrument.