Agricultural Subsidy Transition Bonds

You can tell I’m looking for excuses not to knuckle down and finish my next book project, because I’m catching up with posting things here. I’m very pleased to have put together a bit of research on the Andhra Pradesh Community-Managed Natural Farming programme with Vijay Kumar Thallam, just out in Nature Food. The reason we wrote it is prompted in part by the Indian Government’s PM-PRANAM policy, a plan to wean India off industrial fertilizer imports.

As we noted in the paper, the costs to transition to a net-zero world are estimated at $3.5 trillion per year. Globally, the FAO suggests that $110 billion in fertilizer were imported in 2021. Such fertilizers are generally manufactured using fossil fuels, and ammonia is responsible for 2% of global fossil fuel use. Imports of carbon-intensive fertilizer are a part of the total bill for many agricultural fertilizer subsidy programs. The Indian central government is offering to split any savings that states can make in reducing fertilizer consumption. The way the government has structured the programme, and its brevity, means there’s a nasty shortfall in the payments for a programme that has shown demonstrable reductions in fertilizer use.

TL;DR the programme’s a good idea, but the costs are all up-front and the benefits are long-term, which doesn’t match the programme’s payment schedule.


Read more here. Again, if you’re citing, it’s:

Patel, Raj, and Vijay Kumar Thallam. “Subsidy Transition Bonds as a Funding Mechanism for Agroecological Transformation.” Nature Food  (2024). https://doi.org/10.1038/s43016-024-01000-2.

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