UPSC Mains 2023 GS3 Q14 — Agricultural Subsidies
What are the direct and indirect subsidies provided to farm sector in India? Discuss the issues raised by the World Trade Organization (WTO) in relation to agricultural subsidies. (Answer in 250 words)
Question Decoded — examiner's intent
- Directive verbs
- Discuss
- Scope keywords
- direct and indirect subsidiesfarm sector in Indiaissues raised by the World Trade Organization (WTO)agricultural subsidies
- Implicit sub-parts
- Categorization of Indian farm support into direct transfers versus input-based indirect subsidies.
- The conflict between India's Minimum Support Price (MSP) regime and the WTO's Agreement on Agriculture (AoA).
- Specific technical challenges like the 'de minimis' limits and the 'Peace Clause'.
- The shift toward 'Green Box' compliant subsidies to bypass international trade disputes.
- Common pitfalls
- Failing to distinguish between 'Direct' (PM-KISAN) and 'Indirect' (Power, Fertilizer, Seeds) subsidies clearly.
- Focusing too much on domestic farm distress instead of the international trade law perspective required by the WTO component.
- Neglecting to mention the 'Amber Box' classification which is central to WTO objections regarding price support.
- Using outdated data for WTO 'de minimis' limits or failing to mention the 1986-88 base year price issue.
- Dimensions required
- Economic (Fiscal burden and trade distortion)Geopolitical/Legal (WTO Agreement on Agriculture, Cairns Group vs G33)Administrative (Direct Benefit Transfer efficiency)Technical (Amber, Blue, and Green box classifications)
- Marks allocation hint
Allocate 100 words to define and classify direct/indirect subsidies with contemporary examples. Use the remaining 150 words to detail WTO issues, specifically focusing on the Amber Box, the 10% de minimis limit for developing nations, and the Bali Peace Clause, as this second part carries higher analytical weight.
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