India has introduced a subsidy on sugar can which has ramped up its sugarcane production. In 2017-18 they produced 32.2 million tonnes of sugar and 30 million in 2018-19, compared to 20.3 million tonnes in 2016-17.

a)

Please use the concepts of supply of sugarcane and demand for sugarcane to explain why the Indian subsidies have allowed India's sugarcane production to increase in 2017-2018 and 2018-2019 compared to the period of 2016-2017.

B) Provide a welfare analysis of the impact of India's subsidies to its sugarcane farmers. In other words, use the concepts of supply and demand to illustrate the impact of the subsidies on Indian consumers, Indian sugarcane farmers and the Indian government's revenue.

Hint: Students can assume that India is asmall importer of sugarcane and carry out the welfare analysis accordingly.