finally when handed directly to energy supplying firms subsidies can discourage innovation technological upgrading and cost effectiveness and may even compromise the overall quality of service if perverse subsidies are not removed subsidies for rets may be needed to level the playing field and encourage their utilization however they must provide an encouragement not an end for both users and suppliers in sum subsidies must effectively reach the intended beneficiaries encourage the provision of leastcost services eg avoid covering operating costs and overall be costeffective that is achieve maximum social benefits for each unit spent barnes and halpern for instance in some rural areas the greatest challenge for farmers can be that the payment cycle for electricity connections and monthly bills does not match the income cycle once or twice a year after the harvest simply adapting the modalities of payment to the profile of agricultural users could make the difference