(A). The negative implications of providing subsidies to farmers under the context of "Agricultural Subsidy as a Vice," are as follows:
1. Huge Burden on Government Finances: Agricultural subsidies can impose a substantial financial burden on government resources and public funds. Providing subsidies requires significant budget allocation, which may divert resources from other critical sectors such as health, education and infrastructure. The allocation of a large portion of the budget to subsidies can limit the government's ability to address other pressing needs.
2. Misappropriated Benefits and Inequities: Agricultural subsidies may not always reach their intended beneficiaries and can lead to misappropriation and unequal distribution of benefits. Subsidies may be misused or diverted by middlemen, powerful interest groups, or large-scale farmers, leaving small and marginalized farmers with limited access to these benefits. This results in unequal distribution and exacerbates income disparities.
3. Wasteful Consumption and Overproduction: Agricultural subsidies can lead to wasteful consumption and overproduction, straining resources and market imbalances. Subsidies that reduce the cost of inputs such as water, fertilizers and energy can encourage their excessive use, leading to wastage and environmental degradation. Overproduction resulting from subsidies can cause market gluts and affect prices.
(B). Import substitution is when a country tries to make things at home instead of buying them from other countries. It has some benefits but also some problems:
1. Missing out on world trade: If a country only makes things for itself, it might miss chances to sell things to other countries. This means it might not make as much money as it could.
2. Less competition, more costs: If a country doesn't buy things from other countries, its own businesses might not try as hard to do a good job. This can mean things cost more and aren't made as well.
3. Wasting resources: If a country tries to make everything itself, even things it's not good at, it might not use its resources (like workers, materials and money) as wisely as it could. This can make the whole economy less productive.