Agricultural Subsidy Trap

Context

This model simulates the unintended consequences of long-term fertilizer subsidies in agriculture. While subsidies boost short-term output, overuse of inputs degrades soil health, threatening sustainability and increasing dependency on policy intervention.

Key Variables

Fertilizer Use: Stimulated by subsidy levels.
Soil Health: Degrades over time due to intensive input use.
Agricultural Output: Initially rises with fertilizer use but falls with soil degradation.
Subsidy Response: Adjusts based on falling output, often creating a feedback trap.

Feedback Loops

Reinforcing Loop: Subsidy → Fertilizer → Output.
Degrading Loop: Fertilizer overuse → Soil degradation → Lower Output → More Subsidy.

Policy Relevance

Useful for modeling India’s long-standing urea subsidy programs, soil health card schemes, and transition pathways toward regenerative agriculture or input pricing reforms.

Region/Application

Green Revolution zones (Punjab, Haryana), intensively farmed areas in Andhra Pradesh, or rice-wheat belts facing sustainability issues.