ABSTRACT
Agriculture is the primary base of the Indian economy, although the growth rate of the agricultural sector is not as impressive as its secondary and tertiary sectors. Farmers are fighting for their survival, mainly because of the high costs of production, high interest rates from the private loan providers, and marketing problem from the unavailability of minimum support prices. Some farmers opt to die by suicide, to avoid the debt trap. But the gravity of the problem in agriculture has not been removed, especially for farmers working small-size and medium-size farms. For the sustainability of agricultural growth, the government has taken different schemes in favor of beneficiaries, from time to time. Government intervention is mandatory through an allocation, distribution, and monitoring (ADM) approach, but a question arises about the optimum size of intervention. Against this backdrop, this chapter attempts to determine the optimum size of intervention so that a threshold level of sustainability can be reached for farmers. It also attempts to find out possibilities for demand-oriented alternative farming, because the traditional consumption pattern has been changing over time. The study suggests that the government can provide support to bridge the gap of product quantity, i.e., the difference between actual production and maximum possible production, to protect farmers, which can be treated as a subsidy.
