Global Agricultural Subsidies Linked to Deforestation

Context:

Governments worldwide are spending vast sums on agricultural subsidies — especially fertilizers — but a significant share of this support is environmentally harmful and economically inefficient, according to World Bank environment director Valerie Hickey.

Scale of the Issue

• Global agricultural subsidies total about $2 billion per day.
• Around 14% of these subsidies are directly linked to deforestation.
• Many subsidies are “nature-negative”, contributing to environmental degradation rather than sustainable productivity.

Fertilizer Overuse and Productivity Concerns

• In several developing and emerging economies, including India, agricultural support has traditionally focused on input subsidies like fertilizers.
• Excess fertilizer use can degrade soil health and even reduce crop yields when soils become oversaturated.
• Estimated impact:
  • 10% rise in fertilizer use → only 2% productivity gain
  • But also → 3% increase in respiratory illness

This suggests diminishing returns and growing environmental and health costs.

Policy Shift Recommended

The World Bank argues the key issue is not the amount of spending but how subsidies are designed. It recommends shifting from:

• Input-based support (fertilizers, chemicals)
  ➡ to
• Investment in research, innovation, and sustainable farming practices

India’s Position

• India has allocated ₹1.71 trillion for fertilizer subsidies (FY27) to cushion farmers from global price shocks.
• At the same time, the government is promoting sustainable alternatives such as fertilizer-free natural farming.

India launched the National Mission on Natural Farming in 2024, supported by Prime Minister Narendra Modi, to encourage eco-friendly agriculture.