ABSTRACT
This chapter discusses an innovative economic policy to counter the development-resistant chronic problem of farmers’ poverty and deprivation. The chapter draws on a dissertation paper by Francisco Monge-Arino under Prof. Clauddi Gonzalez-Vega, ‘Neutrality of Decoupled Payments in the Presence of Credit Market Imperfections 2007’. According to the dissertation, the principle of an optimal policy decision is required to be understood in the case of farmers because any attempt to raise their welfare and prosperity by funding farm investment activities through debt is bound to put them under more distress. This reality has never been recognized and given serious consideration in agricultural development planning and implementation. This should have been recognized long before in an economy like India’s, wherein the intended benefits for farming haven’t reach farmers because of the poor regulation of agricultural goods and services from government agencies and private businesses.
