A wise decision


The government made the wise decision to restore the withdrawn subsidy on fertiliser. The subsidy on fertiliser played important role in the recovery of agriculture sector. The lower prices increased the consumption of the fertiliser. The use of urea increased 25% while the DAP increased 30% since the resumption of this subsidy. The farmers took full advantage of the subsidy and increased the use of fertilisers. The cost of production came down.

The farmers feared that if the subsidy abolished it will hurt them badly as the prices will go up immediately. The market analysts predict that the prices of urea bag will jump atleast 300 and DAP bag around 400 rupees. The fertiliser industry has one million tones of urea stocks in the country. The international prices have going up in the international market. The prices have gone up from $315 to $335 per tone.

So finally government made the wise decision to continue the cash subsidy to help the agriculture sector. Agriculture still provides employment to atleast 40% of the workforce even though its share in the GDP has dropped to just 22%. A large rural population still makes their living from agriculture directly or indirectly. The growth in the agriculture sector will help to reduce the rural poverty.

Government should prepare a comprehensive package to fully tape the potential of agricultural growth. The increased subsidy on agriculture will add new jobs and will accelerate the speed of economic growth. The farmers are facing unfavourable conditions as prices of agriculture products has plunged. So the continued subsidy will help the farmers to grow more to earn more money.

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