AGRICULTURAL INPUT SUBSIDIES IN INDIA: QUANTUM OF

SUBSIDIES TO SC/ST FARMERS IN BIHAR

EXECUTIVE SUMMARY

1. Introductory
Subsidies are integral part of fiscal policy in India. The total quantum of subsidies in
India rose from Rs. 2,028 crore in 1980-81 to Rs. 22,800 crore in 2000-2001. Out of
this amount, agricultural subsidies constitute the major portion. Since the year
1993-94 onwards the increase in the quantum of subsidies was much higher. The
subsidies cover numerous areas in economic, social and general services. They
cover a wide range of beneficiaries, agriculturists, capitalists, consumers, depressed
class; rural poor, etc. Subsidies in recent years have become highly controversial.
During the present era of liberalization, globalization and privatization the main
policy thrust seems to be the downsizing of the existing organizations/departments.
Therefore, the subsidies to agriculture sector provided by the government have
been a subject of debate among economists, policy makers and academicians
because of recorded phenomenal rise in subsidies and the present position of fiscal
deficit of the Central and State Governments. This matter assumes greater
significance in the context of ongoing economic reforms in India. Therefore,
subsidies act as instruments of stimulating agricultural production by ensuring
increase in productivity and in attaining self-sufficiency. It is true that the subsidies
are effective in pushing agricultural growth to a certain extent, but it is important to
make sure that these are fiscally suitable or not, whether it is a productive use or
misuse of resources. Most of the subsidies given as support in the name of the poor,
rarely reach the poor and rich farmers got benefits in the name of small and
marginal farmers. The time has, therefore, come to analyze the broad issues of
input subsidies in the country. On the contrary, opponents view subsidies as an
unnecessary government intervention, which impairs the efficiency of pricing by the
market forces. Keeping these facts in view the Directorate of Economics &
Statistics, Department of Agriculture & Co-operation, Ministry of Agriculture,
Government of India has assigned the study entitled “Agricultural Input Subsidies in
India: Quantum of Subsidies to SC/ST Farmers” as common study for all AERCs. The
Agricultural Economic Research Centre, University of Delhi is the Co-ordinator of
this study, which has formulated the study design, questionnaire, etc. In the light of
this background the Agro-Economic Research Centre for Bihar & Jharkhand has
undertaken this study for states of Bihar and Jharkhand.

Objectives of the Study

The present study has been conducted with the following objectives:
I. To examine the utilization pattern of subsidies by different categories of
farmers.
II. To assess the share of SC/ST farmers in total amount of subsidies used, and;
III. To analyze the overall effect of differences in the levels of input subsidy used
by various categories of farmers on crop pattern, cropping intensity, adoption
of improved technology, input use, crop productivity and returns.

Methodology
For the purpose of the study, both direct and indirect input subsidies granted to
agriculture by the Government were taken up. The study is based on both micro
and macro level data. As per direction of the co-ordinator, micro level data have
been collected from various agro-climatic sub-zones of the state. One district from
each agro-climatic zone has been selected. The selected districts were grouped
into wet districts and dry districts. As per gross cropped area irrigated below 30 per
cent of GCA under irrigation was treated as dry district and above 30 per cent of
GCA under irrigation was treated as wet district. In irrigated districts, namely,
Vaishali (47.50%), Katihar (30.37%) and Rohtas ((67.97%) and in dry districts,
namely, Dumka (7.01) and Gumla (2.32%) were selected.

At the first stage of sampling, one block on the basis of existing number of relatively
higher SC/ST population was selected from each of the selected districts. At the
second stage of sampling, a cluster of villages were selected in consultation with
the concerned Block Agricultural Officer keeping in view the required number
beneficiaries of subsidies available in the villages. Then we obtained the detailed
list of the beneficiaries (farmers) of the villages selected, who had enjoyed the
benefits of subsidies (one kind or the other) for agricultural purposes. Further, the
enlisted farmers were classified according to their sizes of land holdings. Land
holding classes have been defined and divided into four broad categories, viz.,
Marginal (0.01 to 1.0 ha.), Small (from1.01 to 2.0 ha), Medium (2.01 to 4.0 ha.) and
large (above 4 ha.). After the classification of sampled farmers under dry districts,
23 marginal, 20 small, 18 medium and 19 large farmers and under irrigated district
56 marginal, 32 small, 19 medium and 13 large farmers were selected for detailed
study. The total number of scheduled caste farmers were 51, scheduled tribe 49
and non-SC/ST 100 which forms the sample size. Thus, in all 200 farm households
were selected for detailed study.

The secondary data were collected from various concerned divisions and
departments of the district and state.

For calculating the quantum of subsidy used by particular farmers, each sample
respondent was asked about the farm (physical and financial benefit) of subsidy
granted/received by them. In direct subsidies fertilizers are assessed from various
angles.

Reference Year
The reference year of the study was agricultural year 1999-2000.

Limitations of the Study

The following are the limitations, which have been encountered in course of the
study:
I. It is worth mentioning that due to non-availability of state level secondary
data till reference year of the study, we had to confine our analysis to
primary data related to the latest year of the study 1999-2000 particularly
because of legal complications. This has been done in view of a letter vide
No. 5428/2002, dated April 24, 2002 of the coordinator of the study.
Therefore, we have taken care of secondary data available upto 1995-96. In
this background the results of the study suffer from its own limitations.
II. It should be pointed out that the data for the reference period of only one
year may not be able to explain many important trends and problems.
Therefore, the scope of the study has its own limitations.

Agricultural Subsidies in the State

In Bihar (Undivided) food crops, pulses, oilseeds and cash crops are grown. The
production of these crops is almost sufficient to meet the total food requirements of
the region except in case of pulses and oilseeds. The State of old Bihar is divided
into two major parts, i.e., Bihar Plain and Plateau region of Chotanagpur and Santhal
Parganas. The agricultural practices vary from plain to plateau. The soil condition,
irrigation sources and input delivery system are more sound in plain region than
that of plateau region. Therefore, the production and productivity of agricultural
produce were found more advantageous in plain region in comparison to plateau
region of the state. The overall production and productivity of the agricultural
produces in the state were much lower in comparison to other states and nation as
a whole. Under these conditions, subsidies are essential to protect the interest of
farmers because majority of the farmers in the state are below the poverty line. In
Bihar, departments supplying agricultural subsidies either reimburse a part of the
cost or make available inputs at lower prices or ensure free of cost supply of inputs.
The Directorate of Agriculture, Directorate of Horticulture, etc. use to offer subsidyin
different forms to the farmers in the state. The Directorate of Agriculture under the
Intensive Cereal Development Programmes spent about Rs. 600 lakhs during 1997-
98. Under special component programmes this department made a total
expenditure of about Rs. 13.08 lakh during 1992-93 to 1997-98. The share of SC:ST
subsidies in the state was 16.5 per cent and 7.0 per cent during 1997-98.

For the promotion of farm mechanization in the state, a number of

machines/implements used for agricultural purposes were distributed through
concerned departments. The financial targets and achievements for the year 1998-
99 were Rs. 836.50 lakhs and Rs. 347.80 lakhs respectively. The subsidy granted by
the Directorate of Horticulture for development of mushroom, spices and
horticulture was estimated at Rs. 135.39 lakh in the year 1999-2000. The total
amount included some other schemes of subsidy also, but the actual amount of
subsidies could not be available at the time of study.

The food and civil supply department distributed subsidies on wheat, rice, sugar,
kerosene oil, etc. This amount on these subsidies was estimated at Rs. 494
thousand during 1999-2000. The per farm indirect subsidy specially fertilizer
subsidy in the selected districts shows that irrigated districts got more subsidy in
comparison to dry districts because farmers of dry districts used these inputs in
lower quantities.

Sampled AREA: An overview

The old Bihar has often been considered a land of paradox with poverty in the midst
of rich natural resources. In terms of area, Bihar is the fifth largest state of the
country and largest among the eastern states of India having an area of 1,73,976
Sq. Kms. It is also the second largest state in terms of population, 864 lakh
according to 1991 census. As per 2001 census, the total population of new Bihar
was 8,28,78,796 and that of the newly created Jharkhand state was 2,69,09,428.
About 90 per cent of the population lives in villages and nearly 80 per cent of which
is directly dependent on agriculture. On November 15, 2000 the Jharkhand state
from ‘United Bihar’ was separated and become new member state of the union of
India. As per Planning Commission (1988), the whole of undivided Bihar is divided
into two parts, i.e., Middle Gangetic Plain and Eastern Plateau and Hills. According
to 1991 census, the total scheduled caste population in the state was 126.20 lakhs
and scheduled tribe population was 66.28 lakh. The overall literacy percentage of
the state was below 40 per cent.

Sampled Districts
All the sampled districts in irrigated areas came into existence in the year 1972-73.
The districts are basically agricultural in character. All the sampled districts of dry
areas consist of uplands, undulations and non-availability of proper irrigational
facilities. They are entirely dependent on rainwater. The land holding size of all the
selected districts reveals that there were majority of marginal and small farms in
the districts. The cropping intensity in Katihar district was (163.75%), Rohtas
district (151.37%), Vaishali district (158.33), Gumla (111.55%) and Dumka district
(103.50%). Paddy was the main food crop in the irrigated districts and dry districts
of the state followed by Rabi crops which was grown in mainly irrigated districts as a
main food crop. The irrigated district occupied prime position in cropping pattern in
comparison to dry region. The average and rural rainfall varies from 1319 mm to
1485.33 mm across the sampled districts of the state. The availability of farm
machinery and implements were found higher in irrigated region in comparison to
dry region. The level of fertilizer consumption was also found higher in case of
irrigated regions in comparison to dry regions (Table – 3.1).

Table No 3.1: Geographical Area and Land Use Pattern

(In ‘000 ha)
Irrigated Dry Undivided
Particulars
Katihar Rohtas Vaishali Dumka Gumla Bihar
291 733 201 558 911 17330
Geographical Area
(100.00) (100.00) (100.00) (100.00) (100.00) (100.00)
Forest Area 2 (0.69) 180 (24.56) - 63 (11.29) 232 (25.47) 2923 (16.86)
Barren Land
22 (7.56) 36 (4.91) 24 (11.94) 34 (06.09) 59 (6.48) 1016 (5.86)
(Uncultivable Land)
Non-agricultural
58 (19.93) 73 (9.96) 39 (19.40) 58 (10.39) 45 (4.54) 2060 (11.88)
Land
Area Under Tree 8 (2.75) 1 (0.14) 9 (4.48) 6 (1.07) 11 (1.21) 269 (1.55)
Culturable Waste Land - 1 (0.14) - 30 (5.38) 2 (0.22) 129 (0.74)
Agri. Barren land - 3 (0.41) - 39 (6.99) 38 (4.17) 393 (2.26)
Other Fallow Land 8 (2.75) 6 (0.82) 1 (0.50) 79 (14.16) 116 (12.73) 1076 (6.21)
Current Fallow Land 33 (11.34) 28 (1.82) 9 (4.48) 79 (14.16) 226 (24.81) 1738 (10.02)
Net Cultivated Area 160 (54.98) 40 (54.71) 120 (59.70) 174 (31.18) 277 (30.41) 7725 (44.57)
Area Cultivated
82 (29.90) 215 (29.33) 72 (35.82) 10 (1.79) 32 (13.51) 2679 (15.46)
More than Once
Total Cultivated
242 (83.16) 616 (84.04) 192 (95.52) 184 (32.97) 309 (33.92) 10404 (60.03)
Land
Source: Bihar through figures, 1995-96.

BASIC FEATURES OF SAMPLE HOUSEHOLDS

Population and Workers
In irrigated districts total population was 675 persons and in dry districts 484
persons lives under 120 and 80 sampled households respectively. The average
family size at overall level in irrigated districts has been worked out to be 5.62
persons per household, whereas in dry districts it was 6.05 persons and at overall
level it was 5.79 persons. The average size of family varied with the variation of
farm size. At overall level, in irrigated districts, the percentage of male, female and
child workers belonging to SC were 35.52, 23.41 and 26.48 per cent respectively. In
ST category it absorbed 23.6 per cent male/25.53 per cent female and 57.06 per
cent child workers. Similarly in dry districts, (at overall level), out of the total
workers percentages male were 12.96 per cent female 3.12 and child 11.36
whereas in ST category, the male percentage was 37.03, female 56.25 and child
40.81. In non-SC/ST category of farms at over all level, in irrigated districts the
male, female and child workers’ percentage and 57.35 per cent respectively. On
the other hand, in dry areas it was 50 per cent for male, 40.62 per cent female and
48.97 per cent child. The agricultural workers were found much higher to total
workers in case of both the sampled districts (Table – 3.7).

Table 3.7: Number of Male, Female & Children in Sample Farm

Households
Irrigated
Marginal Small Medium Large Total
districts
M F C M F C M F C M F C M F C
SC 36 30 47 17 15 19 12 8 16 15 11 19 80 64 101
ST 17 15 21 7 6 10 3 5 3 2 3 2 29 29 38
Others 37 31 51 27 24 55 22 19 26 13 11 18 99 85 150
Total 90 76 119 51 45 84 37 32 45 30 25 39 208 178 289
Dry
Marginal Small Medium Large Total
districts
M F C M F C M F C M F C M F C
SC 6 4 12 3 3 5 2 2 2 - - - 11 9 19
ST 14 19 28 7 9 12 14 11 19 25 17 24 60 56 83
Others 8 10 11 21 17 34 19 21 32 26 16 31 74 64 108
Total 28 33 51 31 29 51 35 34 53 51 33 55 145 129 210
Irrigated &
Marginal Small Medium Large Total
Dry
M F C M F C M F C M F C M F C
SC 42 34 59 20 18 24 14 10 18 15 11 19 91 73 120
ST 31 34 49 14 15 22 17 16 22 27 20 26 89 85 121
Others 45 41 62 48 41 89 41 40 58 39 27 49 173 149 258
Total 118 109 170 82 74 135 72 66 98 81 58 94 353 307 499
Note: Child below 14 years.

Literacy
In irrigated districts at overall level more than 50 per cent of persons were found
literate, whereas in dry district it was above 60 per cent.

Land Holding Size

Land holdings in dry districts were generally large in comparison to irrigated
districts. At overall level, in dry districts, the average size of holding was 2.55 ha
per household, whereas in irrigated districts, it was only 1.76 ha. per household.
The land holding of SC and ST under both conditions were found smaller than that
of non-SC/ST farms. The average size of landholding of SC category was 1.80 ha in
irrigated areas and 1.40 in dry districts, whereas in case of ST category, it was 1.51
ha in irrigated districts and 2.49 ha in dry districts (Table – 3.8 a).

Table No. 3.8 (a): Land Details regarding area owned, leased in,
leased out and average size of holding by size-class
(In ha.)
Irrigated Districts
Average size of
Size classes Total area owned Area leased in Area leased out
holdings
of operational
holding SC ST Other Total SC ST Other Total SC ST Other Total SC ST Other Total

Marginal 16.99 6.31 13.24 43.73 3.17 1.34 4.48 0.87 0.85 0.85 0.86
Small 14.53 6.24 31.1 51.93 1.36 4.31 5.66 1.76 1.56 1.86 1.80
Medium 19.94 6.10 34.21 48.24 2.99 3.05 3.11 2.53
Large 27.66 4.25 29.82 61.72 4.57 4.57 4.61 4.25 4.20 4.39
Total 77.13 22.91 115.86 215.88 4.53 1.34 4.31 10.14 4.57 4.57 1.80 1.51 1.85 1.76
Dry Districts
Marginal 3.22 9.09 5.75 18.07 - 0.46 0.39 0.85 - - - - 0.80 0.79 0.87 0.82
Small 3.61 8.15 22.43 34.18 0.21 0.39 2.27 2.88 - - - - 1.91 1.70 1.90 1.82
Medium 2.75 20.84 30.45 54.03 - - - - - - - - 2.7 2.98 3.04 3.00
Large 0.0 43.20 50.97 94.16 - - - - - - - - 0.0 4.80 5.09 4.95
Total 9.58 81.20 109.60 200.45 0.21 0.85 02.66 3.73 - - - - 1.40 2.49 2.80 2.55
Dry + Irrigated
Marginal 20.22 15.41 26.19 61.83 3.15 1.80 0.24 5.20 - - - - 0.86 0.82 0.85 0.84
Small 18.13 14.39 53.56 86.09 0.86 0.38 1.39 2.65 - - - - 1.72 1.64 1.71 1.70
Medium 17.93 26.94 64.65 109.53 - - - - - - - - 2.56 2.99 3.07 2.96
Large 27.66 43.20 80.78 151.64 - - - - - - 4.57 4.57 4.61 4.32 5.00 3.79
Total 83.95 99.95 225.20 409.10 4.02 2.70 1.64 7.84 4.57 4.57 1.73 2.17 2.25 2.12

Land Use Pattern

In both irrigated and dry areas paddy occupied large area of the GCA, but the
percentage was found quite higher in dry areas. Wheat is the next crop, which
occupied 19.42 per cent of GCA in irrigated and only 4.42 per cent of GCA in dry
areas. The third important crop of the sampled region was maize. Almost all size
classes of farms grew these crops. Besides this, according to agro-climatic
suitability of crops, farmers grew pulses, oilseeds and other cash crops in the
selected areas.
Investment on Farm Assets
At overall level in irrigated districts, the investment of farm assets was worked out
at Rs. 44,879.63. The investment varied with variation of farm size. The marginal
and small farms invested less amount in comparison to medium and large farms
whereas in dry areas the overall expenditure was found to be Rs. 22,864.73 per
farm and the same results were obtained like that of irrigated districts.

Irrigated Area
At overall level in irrigated districts, about 46.06 per cent of farms were found
irrigated whereas in dry area it was only 14.73 per cent.

CROPPING INTENSITY
Under irrigated conditions cropping intensity was found more than 150 per cent at
overall level across the farm size whereas in dry areas it was only 110 per cent.

Proportion of Total Area under HYV Seeds

More than 50 per cent of the areas of GCA under paddy and wheat of irrigated
districts was under high yielding verities in case of medium and large farmers and
in dry districts, the percentage was quite below mainly due to unavailability of
assured irrigation in the region.

Utilization of Subsidies
Agricultural subsidies to farmers in both dry and irrigated areas were mainly direct
and indirect subsidies. These subsidies were granted to the farmers for the
promotion of agricultural production. The inputs on which subsidy were availed by
the sampled farmers were seeds, farm assets, irrigational equipments, fertilizers
and other items. The detail of per farm subsidies availed on these items has been
discussed as follows.

Per Farm Subsidy Availed (Direct Subsidy)

Under direct subsidies, tractor, pump set, sprinkler set, tube-well, well, tanks
minikits of seeds, buffalow, goat and cows were taken into account. Total amount
of subsidy availed under direct subsidies in irrigated districts across size group of
scheduled caste farmers ranged between Rs. 66,446 on large farms to Rs. 7,401.48
on marginal farm. Similarly in the same region in case of scheduled tribe average
amount of subsidies varied from Rs. 28,427.50 on large farm to Rs. 861.0 in
marginal farms. Whereas the amounts for non-SC/ST farmers varied in case of large
farms from Rs. 76,564.43 to Rs. 9839.25 in marginal farm. The analysis of SC/ST
and non-SC/ST established the fact that directs subsidy availed by different
categories of farms increased with the increase in farm size in the sample area.
The social group wise analysis suggests that among the selected classes, scheduled
tribe availed comparatively low amount of subsidies as compared to other classes
due to their poor economic condition.

In the dry districts, the per farm average subsidy availed by different categories of
farms indicates that the amount of subsidies increased with the increase in farm
size. But the amount of subsidies in comparison to irrigated farms was quite low
due to poor status of soil and lack of assured irrigation facilities on one the one
hand and the economic condition of the farmers, on the other hand. Similar results
could be established by the analysis of dry and irrigated farms combined together.
In other words, there had been an increasing trend per farm in relation to farm-size.

It is observed from the analysis that irrigated districts availed larger quantity of
subsidy as compared to dry districts. This may be due to the reason that irrigated
districts required large investment on inputs. The category-wise distribution of
subsidies reveals that the benefits were prominently availed by the large farmers
followed by medium, small and marginal farmers. The farmers belonging to
scheduled caste, scheduled tribe and specially belonging to small and marginal
category of farms were the least beneficiaries of direct subsidies. These findings
confirm the reason for the failure of Government policy both at Central as well as
State levels in assisting the SC, ST, Marginal and Small farmers.

Per Farm Subsidy Availed (Indirect)

The per farm quantity of fertilizers (different groups) used in quintal and value
terms have been worked out for different categories of farms separately for
irrigation and dry areas separately and also irrigated and dry areas taken together.
The analysis indicates that under irrigated districts per farm subsidy on fertilizer
overall level to be Rs. 201.24 for urea, Rs. 247.45 for DAP and Rs. 42.46 for MOP
during the rabi season, whereas in Kharif season, it was Rs. 146.25 in urea and Rs.
181.30 in DAP. Not a single farmer was found to have used any amount on MOP
during kharif season by scheduled caste farms. At overall level, schedule tribe
respondents belonging to marginal category availed low amount, i.e., Rs. 51.48 for
urea, Rs. 129.85 for DAP in rabi season and Rs. 31.59 for urea and Rs. 88.20 for DAP
in Kharif season. Apart from this, large farms of the same social group availed Rs.
113.49 for urea and Rs. 249.90 for DAP during Rabi season. The amounts of
subsidies availed by non-SC/ST farmers at overall level were Rs. 212.63 for urea, Rs.
272.20 for DAP and 90.90 for MOP during Rabi season, whereas in Kharif season,
these amounts were Rs. 146.72 for urea and Rs. 208 for DAP per farm. Analysis
reveals that almost all categories of farms availed fertilizer subsidy. But the
amounts of subsidy in non-SC/ST and SC category in irrigated districts were much
higher than dry districts and scheduled tribes’ categories of farms. This may be due
to the reason that under irrigated districts, farmers were more interested in
adopting improved methods of farming in comparison to farmers of dry districts.
Therefore, the irrigated districts farms applied higher doses of different type of
fertilizers than the farmers of dry districts (Table – 4.24 to 4.26).

Table 4.24: Amount of fertilizer subsidies availed by the All Groups

farmers across farm size in year 1999-2000 (Irrigated District)
Total Quantity of Fertiliser Per Quintal subsidy to Total Subsidies worked out (In
Particulars
Used (In Qtls.) the farmers (In Rs.) Rs.)
N Farm Size Urea DAP MOP Urea DAP MOP Urea DAP MOP
Kharif 0.849 0.568 -- 117 245 386 99.36 139.38 --
56 Marginal
Rabi 1.33 0.78 0.04 117 245 386 156.46 192.85 18.19
Kharif 1.33 0.73 -- 117 245 386 157.52 197.76 --
32 Small
Rabi 1.74 0.93 0.24 117 245 386 204.60 235.42 80.21
Kharif 1.67 1.17 -- 117 245 386 196.13 288.45 --
19 Medium
Rabi 2.42 1.48 0.35 117 245 386 284.00 391.88 136.08
Kharif 2.02 1.36 -- 117 245 386 236.60 329.24 --
13 Large
Rabi 2.59 1.62 0.39 117 245 386 300.42 398.59 155.28
Kharif 1.23 0.78 -- 117 245 386 144.44 194.06 --
120 All
Rabi 1.75 1.04 0.18 117 245 386 204.86 255.96 57.37

Across farm size in year 1999-2000 (Dry District)

Table 4.25 : Amount of fertiliser subsidies availed by the All Groups
farmers
Total Quantity of Per Quintal subsidy
Total Subsidies worked
Particulars Fertiliser Used (In to the farmers (In
out (In Rs.)
Qtls.) Rs.)
N Farm Size Urea DAP MOP Urea DAP MOP Urea DAP MOP
Kharif 0.39 0.47 -- 117 245 386 47.89 110.36 --
23 Marginal
Rabi 0.58 0.69 0.03 117 245 386 54.39 158.88 --
Kharif 0.53 0.78 -- 117 245 386 61.03 176.56 --
20 Small
Rabi 0.76 0.89 0.14 117 245 386 84.28 211.37 --
Kharif 0.69 0.81 -- 117 245 386 78.73 219.17 --
18 Medium
Rabi 0.92 0.87 0.34 117 245 386 102.16 234.18 48.69
Kharif 0.49 0.56 -- 117 245 386 56.49 131.11 --
19 Large
Rabi 0.64 0.61 0.38 117 245 386 73.49 147.17 84.38
Kharif 0.56 0.68 -- 117 245 386 62.32 164.38 --
80 All
Rabi 0.74 0.82 0.18 117 245 386 84.78 198.36 32.44

Table 4.26 : Amount of fertilizer subsidies availed by the All Groups

farmers across farm size in year 1999-2000 (Irrigated + Dry District)
Total Quantity of Per Quintal subsidy
Total Subsidies worked
Particulars Fertiliser Used (In to the farmers (In
out (In Rs.)
Qtls.) Rs.)
N Farm Size Urea DAP MOP Urea DAP MOP Urea DAP MOP
Kharif 0.72 0.54 -- 117 245 386 84.38 130.93 --
79 Marginal
Rabi 1.11 0.75 0.04 117 245 386 126.74 182.96 12.89
Kharif 1.02 0.75 -- 117 245 386 120.41 189.61 --
52 Small
Rabi 1.36 0.91 0.18 117 245 386 158.32 226.17 49.36
Kharif 1.19 0.99 -- 117 245 386 139.02 254.75 --
37 Medium
Rabi 1.69 1.18 0.35 117 245 386 195.53 315.16 93.56
Kharif 1.11 0.88 -- 117 245 386 129.54 211.60 --
32 Large
Rabi 1.43 1.02 0.38 117 245 386 165.68 249.66 113.18
Kharif 0.96 0.74 -- 117 245 386 111.59 182.19 --
200 All
Rabi 1.35 0.95 0.18 117 245 386 156.83 232.92 47.40

Effects of Input Subsidies on Agriculture

Subsidy plays a vital role in the economic development by way of boosting up
production, employment and investment. The effects of subsidy on cropping
pattern, fertilizer use, inputs’ utilization and costs and returns have been analysed
and discussed in the following sections:
CROPPING PATTERN
a. Scheduled Castes
In irrigated districts and irrigated-cum-dry districts, no SC farmer had ever availed
‘low and high’ subsidies respectively for any of the food or other crops. In case of
HYV paddy, the respondent SC farmers of both dry and irrigated-cum-dry districts
used equally highest areas of GCA (37.39%), though they availed the low subsidy
range. Similar trend was witnessed for local paddy also in the above regions
(15.46%). HYV wheat accounted for larger areas of GCA in irrigated and irrigated-
cum-dry districts (95.38%, 13.77% and 14.92% and 13.77%) respectively. These
were availed for HYV wheat by medium and high range farms.

b. Scheduled Tribes
Mono cropping was the main feature of dry districts, so during the kharif season
mainly HYV paddy was grown in quite larger areas. Due to absence of assured
irrigation facilities in dry districts, pulses, oilseeds and other rabi crops were grown
in very smaller areas of GCA by almost all levels of subsidy farms. ST farmers
sharing medium and high levels of subsidies belonging to both dry and irrigated
districts used almost equal areas for growing other crops meant for the aforesaid
two types of subsidy levels (28.07%, 21.16%, 28.07 and 21.16%) respectively.

c. Non-SC/ST
High and low levels of subsidy farms belonging to non-SC/ST category devoted
larger areas of GCA to HYV paddy (47.88%, 46.34%, 46.34% and 36.88%)
respectively. Both high and low levels of subsidy farms of dry and irrigated-cum-dry
districts used quite larger areas for growing HYV wheat (26.39%, 17.88% and
17.88%) respectively. While on the one hand, medium and low levels of subsidy
farms belonging to dry and irrigated-cum-dry districts prominently grew potato, on
the other hand, high subsidy farms of dry districts used quite larger areas for
growing other crops (Table – 5.1).

Table 5.1: Cropping Pattern of Low, Medium and High Subsidies Range
Farms in Irrigated and Dry Districts in terms of Percentage of
GCA under Major Crops.
(% of GCA)
Irrigated District Dry District Irrigated & Dry District
Crops Low Medium High Low Medium High Low Medium High
Subsidy Subsidy Subsidy Subsidy Subsidy Subsidy Subsidy Subsidy Subsidy
 Scheduled Castes
HYV Paddy - 32.49 31.06 37.39 35.43 - 37.39 32.60 31.06
Local Paddy - 10.71 14.96 15.46 15.29 - 15.41 10.88 14.96
Maize - 8.90 11.31 3.27 1.64 - 3.27 8.59 11.31
Others - 2.37 1.35 18.47 14.88 - 15.47 2.86 1.35
HYV Wheat - 15.38 13.77 3.88 4.08 - 3.88 14.92 13.77
Local Wheat - 2.39 5.56 1.64 1.27 - 1.64 2.34 5.56
Pulses - 1.70 2.56 2.26 1.29 - 2.26 1.68 2.56
Oil Seeds - 2.46 1.61 2.31 0.97 - 2.31 2.40 1.61
Potato - 1.50 1.81 0.84 1.36 - 0.84 1.49 1.81
Others - 22.10 16.01 17.48 23.79 - 17.48 22.24 16.01
Total - 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
GCA (ha) - (76.37) (53.94) (8.73) (3.19) - (8.73) (79.56) (53.94)
Scheduled Tribes
HYV Paddy 33.80 - - - 43.26 42.91 33.80 43.26 42.91
Local Paddy 11.39 - - - 12.83 10.21 11.39 12.83 10.21
Maize 10.15 - - - 1.38 2.63 10.15 1.38 2.63
Others 4.03 - - - 11.77 12.87 4.03 11.77 12.87
HYV Wheat 15.95 - - - 0.64 3.48 15.95 0.64 3.48
Local Wheat 1.60 - - - 0.17 0.98 1.60 0.17 0.98
Pulses 0.72 - - - 0.39 2.26 0.72 0.39 2.26
Oil Seeds 1.03 - - - 1.27 1.77 1.03 1.27 1.77
Potato 0.49 - - - 0.22 1.73 0.49 0.22 1.73
Others 20.83 - - - 28.07 21.16 20.83 28.07 21.16
Total 100.00 100.00 100.00 100.00 100.00 100.00
GCA (ha) 36.24 10.72 81.77 36.24 10.72 81.77

Non-SC/ST
HYV Paddy - 36.03 36.88 46.34 41.61 47.88 46.34 37.84 34.89
Local Paddy - 9.69 5.58 6.12 2.04 8.23 6.12 4.88 4.62
Maize - 9.14 7.19 2.37 1.18 0.97 2.37 2.37 4.26
Others - 2.32 1.46 17.88 16.95 26.39 17.88 9.32 1.66
HYV Wheat - 16.80 21.08 8.88 5.33 0.49 8.88 8.74 19.84
Local Wheat - 1.87 1.96 1.04 1.24 1.27 1.04 1.69 1.32
Pulses - 11.09 8.08 4.37 2.73 0.39 9.37 4.86 4.79
Oil Seeds - 0.92 0.37 3.64 3.86 2.88 3.69 1.85 0.18
Potato - 1.96 0.89 0.87 1.04 0.20 0.87 1.66 0.97
Others - 10.18 15.51 8.49 24.06 11.30 8.49 26.79 27.47
Total - 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
GCA (ha) - 111.02 61.46 36.85 89.32 7.14 36.85 200.54 43.99

FERTILIZER CONSUMPTION IN VALUE TERMS

a. Scheduled Castes: Irrigated-Cum-Dry Districts
In irrigated-cum-dry districts (at overall level), low subsidy farms used highest
amount (Rs. 1,218.19/ha) for HYV wheat followed by HYV paddy (Rs. 1,052.37/ha).
The medium subsidy farms accounted for high value in the form of fertilizer
consumption for HYV wheat (Rs. 761.35/ha) like that of low subsidy farms followed
by HYV paddy, local wheat and minimum in case of local paddy.
b. Scheduled Castes: Irrigated Districts
Scheduled Caste farmers of irrigated districts showed similar trend like that of
overall figures. Higher amounts per hectare were used for HYV wheat followed by
HYV paddy and potato (Rs. 1,392.95, Rs. 1,197.60 and Rs. 1,034.52) respectively.

c. Scheduled Caste: Dry Districts

Fertilizer consumption by the SC farmers in dry districts belonging to both low and
medium subsidy farms were similar to that of irrigated and irrigated-cum-dry
districts, though amounts in both types of farms were quite lower in comparison to
the amounts of other two zones. In both low and medium subsidy farms, HYV wheat
was provided high importance (Rs. 300.69/ha and Rs. 416.78/ha) respectively
seconded by HYV paddy (Rs. 289.93/ha and Rs.363.29/ha) respectively.

d. Scheduled Tribes: Irrigated-Cum-Dry Districts

At overall level, ST farmers of high subsidy farms consumed highest amount of
fertilizers for HYV wheat (Rs. 700.96/ha) followed by HYV paddy (Rs. 652.15/ha) of
the same group. In medium subsidy farms also, these were for HYV wheat and HYV
paddy (Rs. 584.39/ha and Rs. 478.16/ha) respectively.

e. Scheduled Tribes: Irrigated Districts

While on the one hand, most of the farmers of medium subsidy level was seen to
have consumed fertilizer subsidy, on the other hand, highest consumption of
fertilizer in value terms were observed (like others), for HYV wheat followed by HYV
paddy, potato and local wheat in low subsidy farms (Rs.525.53/ha. Rs. 451.99 / ha,
and Rs. 308.88/ha) respectively.

f. Scheduled Tribes: Dry Districts

ST farmers of high subsidy farmers consumed maximum quantities of fertilizers (in
value terms) for HYV wheat (Rs. 1,059.61/ha.) followed by HYV paddy of the same
group (Rs.843.88/ha), HYV wheat in medium subsidy farms (Rs.584.39/ha.), HYV
paddy of the same subsidy level (Rs.478.16) and in low subsidy farms also HYV
wheat itself (Rs.373.40/ha) was ahead.

g. Non-SC/ST:
Irrigated-Cum-Dry Districts
Analysis relating to fertilizers’ consumption by Non-SC/ST farmers of irrigated-cum-
dry districts (at overall level), reveals that highest value was consumed by medium
subsidy farms for HYV wheat and HYV paddy (Rs. 960.25 /ha and Rs. 771.78/ha)
respectively followed by high subsidy farms for the same two crops as above (Rs.
678.91/ha and Rs. 652.40/ha) respectively.

h. Non-SC/ST: Irrigated Districts

Non-SC/ST farmers of medium subsidy farms were found to have consumed highest
expenses for fertilizer in case of HYV wheat (Rs. 786.86/ha) followed by HYV paddy
(Rs. 666.43/ha). In high subsidy farms, similar trends were observed.

i. Non-SC/ST: Dry Districts

In dry districts also, Non-SC/ST farmers of medium and high subsidy farms showed
similar consumption trend of fertilizers for HYV wheat, HYV paddy and local wheat,
i.e., Rs. 1480.45, Rs. 1087.85, Rs. 387.41 and Rs. 826.23, Rs. 755.45 and Rs. 274.62
respectively (Table – 5.2).
Table No. 5.2.: Fertilizer Consumption per hectare in Value Terms (in
Rs./ha.).
Scheduled Caste
Irrigated District Dry District Irrigated & Dry District
Low Med. High Low Med. High Low Med. High
Crops
Subsidy Sub. Sub. Subsidy Sub. Sub. Subsidy Sub. Sub.
HYV Paddy 1197.60 725.92 - 289.93 363.29 - 1052.37 684.08 -
Local Paddy 541.17 257.91 - 79.73 113.36 - 467.34 241.23 -
HYV Wheat 1392.95 806.29 - 300.69 416.78 - 1218.19 761.35 -
Local Wheat 463.60 432.07 - 133.88 118.22 - 410.84 395.86
Potato 1034.52 685.55 - - - - - - -
Scheduled Tribe
HYV Paddy 451.99 - 364.64 305.43 478.16 843.83 372.05 478.16 652.15
Local Paddy 199.05 - 130.89 91.61 173.48 264.38 140.45 193.48 210.98
HYV Wheat 525.53 - 162.98 373.40 584.39 1059.61 442.55 484.39 700.96
Local Wheat 308.88 - 189.86 107.97 296.93 308.69 199.29 296.93 261.16
Potato 449.23 - 330.78 - - - - - -
Non-Scheduled Caste/Scheduled Tribe
HYV Paddy - 666.43 549.35 - 1087.85 755.45 - 771.78 652.40
Local Paddy - 177.30 171.16 - 380.11 177.52 - 228.00 174.31
HYV Wheat - 786.86 797.38 - 1480.45 826.23 - 960.25 678.91
Local Wheat - 337.77 221.43 - 387.41 274.62 - 350.18 248.03
Potato - 613.53 490.73 - - - - - -

Irrigation Use
The analysis reveals that in case of scheduled caste, no farmers of high subsidy
farms spent any amount on irrigation use. The medium subsidy farms were
estimated to have made maximum use of irrigation for HYV wheat (Rs. 373.24 / ha)
in irrigated-cum-dry districts (Table – 5.3).

Table 5.3: Irrigation Use per hectare in Value Terms Irrigated Districts (In
Rs./ha)
Scheduled Caste
Irrigated District Dry District Irrigated & Dry District
Low Med. High Low Med. High Low Med. High
Crops
Subsidy Sub. Sub. Subsidy Sub. Sub. Subsidy Sub. Sub.
HYV Paddy 200.80 344.24 - - - - 200.80 344.24 -
Local Paddy 14.77 19.87 - - - - 14.77 19.87 -
HYV Wheat 162.97 398.09 - 471.60 183.55 - 212.35 373.34 -
Local Wheat 86.48 62.96 - - - - 86.48 62.96 -
Potato 85.07 205.03 - - - - - - -
Scheduled Tribes
HYV Paddy 287.69 265.15 124.29 - - - 287.69 265.15 124.29
Local Paddy 80.94 169.24 87.66 - - - 80.94 169.24 87.66
HYV Wheat 164.37 285.17 40.92 65.64 218.39 187.39 45.34 38.74 128.80
Local Wheat 93.13 129.54 23.97 35.41 107.26 117.24 24.67 108.97 79.93
Potato 194.16 239.35 48.79 - - - - - -
Non-Scheduled Caste/Scheduled Tribes
HYV Paddy - 200.36 272.01 - - 287.39 - 200.36 279.74
Local Paddy - 23.18 39.14 - - - - 23.18 -
HYV Wheat - 154.68 227.84 - 108.39 119.29 - 143.11 173.56
Local Wheat - 40.20 88.11 - 53.87 65.11 - 43.62 76.61
Potato - 63.69 70.41 - - - - - -

In case of irrigated districts, SC respondent farmers of medium and low subsidy

farms showed almost similar response like that of irrigated-cum-dry districts (except
HYV wheat in low subsidy farms). Per hectare use of irrigation for these crops in
medium and low subsidy farms were Rs. 398.09, Rs. 344.94, Rs. 162.97 and Rs.
200.80 respectively. In irrigated-cum-dry districts irrigation use were seen in all the
three types of farms, viz., low, medium and high. The analysis indicates that at
overall level, highest irrigation use per hectare were made for HYV wheat in high
subsidy farms (Rs. 128.80) followed by low subsidy farms (Rs. 45.34) and medium
subsidy farms (Rs. 38.74). Local paddy was also provided good share along with
local wheat in all the three types of farms.

Crop-wise total Input Use

It was observed by the analysis that in case of scheduled caste, high subsidy farms
spent higher amount on total input use in production of HYV wheat followed by
medium and low level subsidy farms. The medium subsidy group bore higher
amounts in raising the crops, like local paddy and local wheat in comparison to high
subsidy group farmers.

In case of scheduled tribes, only low subsidy farms were found to have made and
expenditure on total input use and their total costs for production of HYV paddy,
HYV wheat and local wheat were calculated at Rs. 6,829.81, Rs. 3,071.57, Rs.
6,132.64 and Rs. 2,917.10 respectively.

In case of Non-SC/ST farmers, the total cost of production were worked out to be Rs.
7062.67 for HYV paddy, Rs. 3,900.66 for local paddy, Rs. 6,092.37 for HYV wheat
and Rs. 2,632.52 for local wheat by high subsidy group farmers which were higher
in comparison to medium subsidy groups, i.e., Rs. 6005.93, Rs. 3357.63, Rs.
5964.23 and Rs. 2583.69 respectively. The analysis finds that the cost of
production was highest in case of high subsidy farms in comparison to other subsidy
farms except in some cases.

Costs and Returns

In dry districts, the returns over costs for HYV paddy in low, medium and high
subsidy groups were positive on all types of subsidy levels. In general, scheduled
caste farmers’ total costs ranged between Rs. 6,237.05 on low subsidy farms to Rs.
5,159.77 on medium subsidy farms. The total returns varied from Rs. 10,191.24 to
Rs. 11,085.76 on the same subsidy group farms. In case of ST farms, total costs for
these crops ranged between Rs. 5,394.88 on medium subsidy farms to Rs. 5,822.80
on high subsidy farms. The total returns varied between Rs. 9,087.33 to Rs.
10,768.74 in the same levels of farms. The net returns varied from Rs. 3692.45 on
medium subsidy farms to Rs. 4,945.94 on high subsidy farms. In case of Non-SC/ST
farmers, total cost ranged between Rs. 5084.39 in low subsidy farms to Rs.
6,357.49 on medium subsidy farms. The total returns were worked out to be Rs.
8,997.68 on high subsidy farms to Rs. 11,097.58 on low subsidy farms. The net
returns were worked out at Rs. 3,405.07 on high subsidy farms to Rs. 6,012.99 on
low subsidy farms. The returns on lower subsidy farms were higher which might be
due to the fact that this group of farmers performed their agricultural activities
themselves because they depended on agriculture only. The overall analysis
indicates that the net returns decreased with the increase in farm size. The
discussion also indicates that the returns over costs were lower on high subsidy
group of farms (Table – 5.6 to 5.9).

Table 5.6 : Costs & Returns Per hectare Costs and Return from HYV Paddy
and Local Paddy in Sample Farms of Dry Districts
HYV Paddy (In Rs./ ha) Local Paddy (In Rs. /ha
Low Medium High Low Medium High
Items Items
Subsidy Subsidy Subsidy Subsidy Subsidy Subsidy
Scheduled Caste Scheduled Caste
Total Cost 6237.05 5159.77 - Total Cost 2949.95 3248.39 -
Total Return 10191.24 11085.76 - Total Return 4685.30 6188.20 -
Net Return 3954.19 5925.99 - Net Return 1735.35 2939.81 -
Scheduled Tribes Scheduled Tribes
Total Cost - 5394.88 5822.80 Total Cost - 2383.49 3175.35
Total Return - 9087.33 10768.74 Total Return - 4480.35 5449.37
Net Return - 3692.45 4945.94 Net Return - 2096.86 2274.02
Non-SC/ST Non-SC/ST
Total Cost 5084.39 6357.49 5592.61 Total Cost 3089.94 3007.51 2497.45
Total Return 11097.38 10778.55 8997.68 Total Return 6689.09 6241.82 4977.62
Net Return 6012.99 4427.06 3405.07 Net Return 3599.15 3234.31 2840.18

Table 5.7: Per hectare Costs and Returns from HYV Wheat and Local
Wheat in Sample Farms in (Dry Districts)
HYV Wheat (In Rs./ ha) Local Wheat (In Rs. /ha
Low Medium High Low Medium High
Items Items
Subsidy Subsidy Subsidy Subsidy Subsidy Subsidy
Scheduled Caste Scheduled Caste
Total Cost 5519.45 6084.89 - Total Cost 2180.45 2239.44 -
Total Return 8965.65 11325.90 - Total Return 4475.01 5430.88 -
Net Return 3446.20 5241.01 - Net Return 2294.56 3191.44 -
Scheduled Tribes Scheduled Tribes
Total Cost - 5288.60 5707.39 Total Cost - 2317.36 2220.91
Total Return - 8066.54 8919.89 Total Return - 4400.00 4821.32
Net Return - 2777.94 3212.50 Net Return - 2082.64 2600.41
Non-SC/ST Non-SC/ST
Total Cost 5989.74 5548.98 5283.74 Total Cost 2002.93 2085.48 2249.67
Total Return 11655.94 10516.59 9394.36 Total Return 5530.28 5156.40 5083.12
Net Return 5666.20 4967.61 4110.62 Net Return 3267.35 3070.92 2833.45

Table 5.8 : Per hectare Costs and Returns from HYV Paddy and Local
Paddy on Sample Farms in Irrigated Districts

HYV Paddy (In Rs./ ha) Local Paddy (In Rs. /ha)
Low Medium High Low Medium High
Items Items
Subsidy Subsidy Subsidy Subsidy Subsidy Subsidy
Scheduled Caste Scheduled Caste
Total Cost - 6495.19 7164.31 Total Cost - 3559.00 5222.14
Total Return - 13171.25 14314.08 Total Return - 6422.89 6877.45
Net Return - 6676.06 7149.77 Net Return - 2863.89 1655.31
Scheduled Tribes Scheduled Tribes
Total Cost 6829.80 - - Total Cost 3071.57 - -
Total Return 12269.44 - - Total Return 5573.53 - -
Net Return 5439.64 - - Net Return 2501.96 - -
Non-SC/ST Non-SC/ST
Total Cost - 6792.24 6065.93 Total Cost - 3402.56 3357.63
 Total Return - 13266.55 11924.83 Total Return - 7530.22 7356.13
Net Return - 6474.31 5858.90 Net Return - 4127.66 3998.50

Table 5.9 : Per hectare Costs and Returns from HYV Wheat and Local
Wheat on Sample Farms in Irrigated Districts
HYV Wheat (In Rs./ ha) Local Wheat (In Rs. /ha)
Low Medium High Low Medium High
Items Items
Subsidy Subsidy Subsidy Subsidy Subsidy Subsidy
Scheduled Caste Scheduled Caste
Total Cost - 6117.29 6812.67 Total Cost - 2869.89 2701.83
Total Return - 10632.28 11215.81 Total Return - 5957.40 6239.37
Net Return - 4514.99 4403.14 Net Return - 3087.51 3537.54
Scheduled Tribes Scheduled Tribes
Total Cost 6132.64 - - Total Cost 2917.10 - -
Total Return 8982.72 - - Total Return 5037.27 - -
Net Return 2850.08 - - Net Return 2120.17 - -
Non-SC/ST Non-SC/ST
Total Cost - 6092.37 5964.17 Total Cost - 2632.52 2583.70
Total Return - 12772.12 11808.10 Total Return - 5968.32 5488.88
Net Return - 6679.75 5843.93 Net Return - 3335.80 2905.18
Problems in Getting Subsidies by the Farmers
In the state of Bihar, the optimum use of agricultural inputs were found almost very
low or limited. It was observed that a vast gap had prevailed between the
recommended and existing doses of inputs in various crops. The reason for
improper use of these inputs (as reported by the farmers) were recorded as high
prices and poor economic background of farmers, low capacity to buy the required
inputs, scarcity of credit facilities in the area, etc.

CONCLUSIONS
So far the quantum of subsidies to SC/ST farmers are concerned it may be
mentioned that the farmer belonging to scheduled caste and scheduled tribe groups
of different size-classes, particularly medium, small and marginal farmers were in
the habit of utilizing substantially minimum quantities of subsidized inputs. Such
trends were prominently found in case of farmers of the dry regions. The reasons
for such unfortunate state of affairs may be enumerated as follows.

Firstly, the farmers in general were not aware of the efficiency (characters) of those
subsidized inputs. It might be due to lack of dissemination of information. This
might be a case of failure of transmission of technological development from
laboratory to the farmers in the land of a typically backward agricultural economy
like Bihar & Jharkhand. This was one of the pertinent reasons for non-utilization of
inputs and hence, low amount of benefits from subsidized inputs.
Secondly, subsidized input use depended upon the availability of all kinds of
complementary inputs simultaneously like fertilizer, irrigation and other direct
subsidies. It has been observed in course of field survey that the farmers belonging
to even big scheduled caste and scheduled tribe did not receive the right quantity
at right time for cultivation of crop and for undertaking other agricultural activities.
This was a very important factor, which precludes the SC/ST farmers in
agriculturally backward region to use subsidized inputs. Land particularly in study
areas of Bihar and Jharkhand was found to be more thirsty than hungry. They need
both fertilizer and irrigation water at the same time, which is, for all practical
purposes, conspicuous by their absence.

Thirdly, in course of investigation it was observed that SC/ST farmers in particular

were not in a position to collect desired quantity of inputs at the right prices. The
prices particularly charged for fertilizers, were higher than the subsidized prices.
This was because of the existence of imperfection of the input market. More clearly,
some dealers in the rural areas used to purchase subsidized inputs from the
authorized wholesale dealers and sold it out at much higher prices to the farmers
including SC/ST when the demands for fertilizers were at the peak level. This acted
as prohibiting factor for utilizing appropriate quantity of inputs by all size classes of
farmers belonging to SC/ST groups. As point of fact, it is also pertinent to maintain
that some SC/ST farmers who were poor in resource endowment were bounded in
the labour market, capital market and output market. This compelled them to
purchase inputs at very high prices. During the course of our field survey it was
observed that the farmers specially marginal and small did have neither capability
nor entitlement in the subsidized input market.

Fourthly, the use of subsidized inputs and hence, the possibility of deriving benefits
from subsidized inputs depended upon the expected price likely to be revised by
the primary producers. It has been observed in the study area that primary
producers’ share in consumers’ rupee was very less. Hence, this did not provide any
effective incentive for utilizing subsidized inputs. It has been reported by some of
the respondents that some-times, the vegetables and cash crops ought to be sold at
throwaway prices particularly in remote rural areas.
Finally, another interesting observation was that there was a significant difference
in the use of fertilizer or other subsidized inputs between the farmers of all size
groups in the SC/ST and particularly most of the marginal and small groups of non-
SC/ST farmers located in an area proximate to urban areas, where there were good
transport facilities, storage facilities, good network of information flows, etc. and
between and those farmers farming in the relatively remote areas. This location
specificity and close proximity of citizens to towns acted as a positive factor for
utilizing subsidized inputs. Farmers in both irrigated and dry districts of Bihar had to
cultivate in areas, which were largely denied of all the facilities. Market
imperfections, lack of infrastructural facilities, etc. acted as negative factors for use
of subsidized inputs in Bihar.

It has also been observed in course of field survey, that there were some SC/ST
farmers who received subsidized inputs. But the farmers because of their economic
conditions (acute poverty) they had to sell out those subsidized items without
utilizing them for their own production purposes.

Action Points
The following are some policy prescriptions which are ought to be considered by the
planners, policy-makers, government officials and concerned departments for
making the input subsidies more effective and to ensure the smooth and honest
distribution of these items:

1. At present, subsidized inputs are supplied at block level only. The dates and
time of distribution of different subsidized items are not exactly known to the
farmers of remote areas. Several visits are made by the beneficiary farmers
causing loss of money and energy to obtain/collect even the minimum
quantities of some of the inputs. So, the distribution of subsidized inputs be
made at the panchayat level. [Attn: Directorate of Agriculture Government
of Bihar & Jharkhand].
2. Inputs like fertilizers and seeds are distributed both by government and
private traders to the beneficiaries of the area. Monopolization of market and
incidence of realizing higher prices from the SC/ST farmers by creating
artificial scarcity of these items have wide scope in the state. Hence, sale
counters should be opened at PACS/LAMPS/FSS and quota of fertilizers and
 seeds should be fixed according to the corresponding size classes. [Attn.:
Directorate of Agriculture and the Registrar, Co-operatives, Governments of
Bihar and Jharkhand].
3. Disbursement of subsidized agricultural inputs (particularly, seeds, pesticides,
small agricultural implements, etc.) should be strengthened and streamlined
by the state government. [Attn.: Directorate of Agriculture,
Governments of Bihar and Jharkhand].
4. Serious monopolistic and oligopolistic defects prevailing in the marketing of
agricultural inputs should be minimized. [Attn.: Directorate of
Agriculture, Government of Bihar, Directorate of Agriculture & Co-operation,
Government of India.]
5. Marketing intelligence activities should be streamlined in such a way that the
semi-literate/illiterate marginal and small farmers belonging to SC/ST
categories (in particular) are able to feel the pulse of the facilities of the
subsidized agricultural inputs at an appropriate time and in adequate
quantities too. [Attn: Directorate of Agriculture, Government of Bihar and
Jharkhand]
6. Farmers must be made aware of all prevailing programmes/schemes of
subsidy. Prior to the distribution of different subsidized agricultural inputs,
time, place and mode of distribution should be announced/notified through
effective use of extension machinery and print media. It is more necessary
for ensuring full exploitation of all subsidized inputs by larger number of
marginal and small SC/ST farmers. [Attn.: Directorate of Extension,
Directorate of Agriculture, Governments of Bihar and Jharkhand.]
7. Direct subsidies for promoting modern agriculture should be continued on
sharing basis among between four partners, namely: Central Government,
State Government, District and Village with an enhanced allocation of
amounts for direct subsidies. [Attn.: Ministry of Agriculture, Government of
India, Department of Agriculture, Governments of Bihar and Jharkhand].
8. Proper supervision/monitoring should be done for the proper usage of
sbsidised agricultural inputs particularly by the marginal and small farmers
belonging to SC and ST categories so as to check the misuse and to ensure
development of agricultural sector. [Attn.: Directorate of Concerned
 Departments, Government of India and Governments of Bihar and
Jharkhand].
9. The data on direct subsidies provided under various schemes/programmes
are not available even at the state level headquarters on account of which
the analysis assessing the distribution and impact thereof is badly affected.
Therefore, the directorate of concerned departments dealing with the types
of subsidies should publish a Compendium incorporating the allocation,
quantum of distribution, targets and achievements of all types of subsidized
items so as to make the management efficient. [Attn. Directorate of Statistics
& Evaluation, Governments of Bihar and Jharkhand].
10. The pattern of fertilizer subsidy is irrational irrespective of farm and
social classes, accruing large benefits to the affluent farmers. To ensure the
benefits of the programme to the socially and economically deprived section
of the society, priority showed be given on these sections. So that, on the one
hand, larger qualities of subsidies could be availed them and on the other
hand, basic objectives of the subsidies are not defeated. [Attn: Ministry of
Agriculture, Government of India]
11. Unnecessary delay in the distribution subsidy was reported. Necessary
steps should be taken to case the processing for timely allotment and
distribution of subsidy [Attn: Concerned department, Governments of Bihar
and Jharkhand and Government of India]
12. In enclosing the beneficiaries, favoritism and a sort of malafide intentions
were reported, it is therefore, suggested that proper vigil should be kept to
stop irregularities. [Attn: Concerned departments, Governments of Bihar and
Jharkhand].

