India’s agricultural subsidies played a vital role in boosting food production in the country, from about 50 million tonnes in 1950-51 to a record 330 million tonnes in 2022-23. However, the subsidies, intended to incentivise farmers for adopting new technology, chemical inputs, machinery etc., have led to inefficiencies in input use, over-exploitation of groundwater and environmental pollution across the globe. According to the World Bank’s latest report, ‘Recipe for a Livable Planet’ released in May 2024, inefficient use of input subsidies has resulted in reduced global freshwater supplies and increased aquatic nitrogen pollution to an extent of about 17 per cent during the last 30 years.

Similarly, in India, continuous cultivation of rice supported by free electricity and assured procurement at support prices has led to over-exploitation of groundwater in major producing States. The extraction of groundwater surpassed its recharge substantially to the extent of about 165 per cent in Punjab and 134 per cent in Haryana, according to the National Compilation on Dynamic Ground Water Resources of India, 2023, Ministry of Jal Shakti.

In addition, inefficient use of input resources also contributed for increased greenhouse gas (GHG) emissions from agricultural production. As a result, India emerged as the third largest Agrifood System emitter in the world after China and Brazil, as per the World Bank’s report. There is, therefore, an urgent need for policy measures to devise requisite strategies for reorienting agricultural subsidies to promote sustainable production practices for efficient input use, enhancing yields and reduce environment pollution.

Towards this, it is vital to rationalise input subsidies for optimal use of fertilizers and irrigation water. The application of chemical fertilizers has increased manifold from about 2 kilogram per hectare (kg/ha) on average in the early 1960s to about 141 kg/ha in 2022-23, according to The Fertiliser Association of India. Further, fertilizer application is more than 200 kg/ha in major producing States like Andhra Pradesh with 242 kg/ha, Punjab with 241 kg/ha, Telangana with 229 kg/ha and Haryana with 205 kg/ha.

Declining yield

In this regard, it is important to note that yield responsiveness of one kg of fertilizer has declined significantly from about 13.5 kg grain in 1970s to about 3.7 kg grain in 2000s. Research suggested that continuous excess application of chemical fertilizers has led to sulphur accumulation, which could limit the usage of other nutrients, thereby reducing fertilizer responsiveness. Hence, there is an urgent need to rationalise fertilizer subsidy with direct benefit transfer to farmers in accordance with crop specific recommended doses and soil fertility status using soil health cards. In addition, judicious use of chemical fertilizers together with organic manures will help in reducing chemical pollution, cost of cultivation and improving incomes of farmers.

Further, subsidies in the form of free electricity for irrigation and guaranteed procurement at support prices have resulted in extensive cultivation of rice and sugarcane replacing crops with low water requirement like nutri-cereals, pulses and oilseeds.

Furthermore, flood irrigation method of rice cultivation is leading to over-exploitation of groundwater and increased GHG emissions. The emissions from rice cultivation accounted for about 17.4 per cent of total GHG emissions from agriculture sector in the country, according to the India Third National Communication submitted to The UN Framework Convention on Climate Change (UNFCCC) in December 2023.

Considering the crucial position of rice in India’s food security and dwindling groundwater resources, there is an urgent need to devise measures to promote innovative rice cultivation practices that can reduce water use without affecting yields. Towards this, Sustainable Rice Project conducted by the International Finance Corporation (IFC) and Olam in Haryana indicated that use of climate-smart sustainable rice cultivation practices has helped reduce water requirement by 15-20 per cent without reducing yield in 2020. Such innovative technology and cultivation practices need to be customised and promoted for widespread adoption across the country.

Indian agriculture is extremely vulnerable to climate change and weather aberrations with rainfed cultivation accounting for more than 50 per cent of area and 40 per cent of output. A 6 per cent below normal rains in kharif 2023-24 resulted in a fall in output of oilseeds by 11.5 per cent, pulses by 10 per cent and cereals by 6 per cent according to second advance estimates of the Ministry of Agriculture. Under such a situation, it is imperative to reorient agricultural subsidies to promote sustainable production practices for improving input use efficiency, enhancing incomes, reducing pollution and enabling adaptation to climate change towards future food security.

Reddy is Joint Director, School of Crop Health Policy Support Research, ICAR-National Institute of Biotic Stress Management, Raipur, and Lingareddy is Senior Economist, Sustainable Finance and Agriculture, Mumbai. Views are personal

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