Q. With reference to the farm subsidies consider the following statements:
1.A direct subsidy is provided to the farmer by discounts on agricultural purchases like seeds and fertilizers whereas Indirect subsidy is provided in the form of cash.
2.Farm subsidies help in the improvement of nation’s Human Development Index (HDI).
3.High amount of farm subsidies put excessive burden on Government finances by reducing space for capital expenditure.
Which of the statements given above is/are correct?

[A] 1 and 2 only

[B] 3 only

[C] 2 and 3 only

[D] 2 only

Answer: C
Notes:

Statement 1 is incorrect. A direct subsidy is provided to the farmer in the form of cash. Indirect subsidy is provided by discounts on agricultural purchases like seeds and fertilizers.

Statement 2 and 3 are correct.  Improved farm incomes and food security aids in addressing issues like malnutrition, improving overall living standard leading to the improvement of a nation’s HDI. High amount of farm subsidies put excessive burden on Government finances by reducing space for capital expenditure.

Source: ForumIAS