Price-Support versus Fertiliser Subsidy-An Evaluation

An Evaluation Jagrup Singh Sidhu D S Sidhu The relative efficiency and equity of price-support compared to the fertiliser subsidy policy is evaluated applying an analytical framework to Indians rice and wheat economy. The results demonstrate that fertiliser subsidy policy is more beneficial than price-support, and called for reducing the fertiliser price by about 27 per cent to achieve self sufficiency Low price elasticity of output, high price elasticity of fertiliser demand and high production elasticity of fertiliser contributed to the relative superiority of fertiliser subsidy policy over price-support policy. Distributional and inflationary implications indicate that the fertiliser subsidy policy is more egalitarian than the price-support policy and is also anti-inflationary.