Question

________ lower the cost of farming because the government pays part of the price charged for inputs.

Answer 1

Subsidies lower the cost of farming because the government pays part of the price charged for inputs.

Explanation:

• The actual subsidies accruing to the farmers for use of these inputs is considerably lower than the estimated subsides.
• Therefore, improving the efficiency in the production and management system of these key farm inputs can reduce a substantial part of the burden of input subsides on central or state governments. The subsidy is a government incentive.