Actionable insights on equities, fixed-income, macros and personal finance Start 14-Days Free Trial
Actionable investing insights Get Free Trial
Charts & Analysis

Chart: Paying Farmers More To Sow Less


In the Mid-Year Analysis, the FinMin has revealed that we have distanced ourselves from reality more than ever. Despite a great monsoon, we might end up seeing prices of food rise, because the area sown, of the Kharif crop, in 2011-12 is mostly lesser than the previous year.


But the amount of money the government pays – the minimum support price – of the same crops is up substantially, from 7% to as much as 18%.

Essentially, we the taxpayers are paying more for food to farmers who have sown lesser – the price increase is not working as an incentive to produce more. The NREGA may be playing a part (farm labour availability has reduced).

And if you’re wondering, the government has purchased 200% to 300% of the amount of stock needed (of wheat and rice). Much of this rots in our warehouses, and the food subsidy bill is needlessly high. Your taxes hard at work.


Like our content? Join Capitalmind Premium.

  • Equity, fixed income, macro and personal finance research
  • Model equity and fixed-income portfolios
  • Exclusive apps, tutorials, and member community
Subscribe Now Or start with a free-trial