subsidy on fertilizers

The Central Government has approved subsidy of Rs 22 thousand crore on two major fertilizers. The Cabinet chaired by Prime Minister Modi approved the prices suggested by the Ministry of Fertilizers for fertilizers containing phosphorus and potassium under Nutrition Based Subsidy (NBS). With this decision, farmers will continue to get fertilizers for Rabi season crops at cheaper prices. Farmers grow crops mainly in two cycles in the year – Kharif and Rabi. For the crop to flourish well, fertilizers have to be used. Phosphorus strengthens the roots of plants and helps them develop seeds and fruits properly. Potassium or potash is essential for the health and growth of plants, which protects them from diseases and cold or dry weather.

Even before the Kharif crop this year, the government had announced a subsidy of Rs 38 thousand crore on fertilizer. Farmers need more fertilizers in Rabi season because their main crop wheat is irrigated several times in which fertilizer is used. Fertilizer is also required for crops like gram, pea, mustard. In such a situation the demand for fertilizer increases. But in the matter of fertilizers, India faces a double challenge. First, India has to depend a lot on other countries. According to government data, domestic production of phosphate and potash fertilizers in India is about 25 million metric tonnes, which is half of the country’s total requirement.

The remaining fertilizers have to be imported from countries like China, Russia, Morocco, Jordan and Saudi Arabia. This is where the second challenge arises, when any kind of instability in the international market starts increasing the prices and there is a danger of fertilizers becoming expensive in India also. The international price of fertilizer has also increased for some time. In order to provide fertilizers to the farmers in appropriate quantity and at appropriate prices, the government has made arrangements to provide subsidy on phosphate and potash fertilizers at concessional rates, which is applicable since 2010. Subsidy is also given on urea, another fertilizer most used in farming, which contains nitrogen. In June this year, the government had announced to continue the subsidy on urea for three years. To ensure the food security of the country, the search for alternatives to these essential fertilizers should also continue.

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