Subsidies on Mechanisation and Fuel

Subsidies on agricultural mechanisation and agricultural fossil fuel use, have been common in various parts of the world. As well as direct subsidies on farmer price of fuel, they have included subsidised credit for tractor purchase, and subsidised tractor hire services. In some countries, subsidies on tractor hire intended to help farmers through drought periods, have become widespread even in non-drought years.

Such subsidies have discouraged the use of draught animal power while contributing much more then draught animal power to:

- expansion of cultivation
- direct negative impacts through fossil fuel use

Subsidised mechanisation does not have the positive impact of DAP in:

- importing plant nutrients

Policy Options

Phase out subsidies on mechanisation

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