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More than 80% of farmers in India are smallholders cultivating less than 5 acres. Further, the...

More than 80% of farmers in India are smallholders cultivating less than 5 acres. Further, the productivity of crops in India is relatively low as compared to developed countries like the USA, Canada, etc. Under such conditions, which of the following policies is better in terms of its equity and growth impacts and why:

a. Minimum support price policy

b. Input subsidies

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Answer #1

In my opinion, if we want to improve the yield of the crop, then it is important to have the right quality of seeds, fertilizers, pesticides and other important materials that can provide good crop productivity. All thee are the input of the crop harvesting. Therefore if the government wants to improve the productivity of crops in India is relatively low as compared to developed countries like the USA, Canada, etc, it should provide the input subsidies as it will provide them the better opportunity to have improved production and quality by the use of better quality inputs

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