DBT will save the government quite a lot on the subsidy by eliminating misuse and ensuring better targeting through Aadhaar linkage The manufacturers of non-urea fertilisers are given ‘uniform’ subsidy (on per nutrient basis) under the nutrient based scheme (NBS). —————————————————————————————————– According to a survey by NITI Aayog, nearly two-thirds of the farmers don’t favour direct benefit transfer (DBT) of fertiliser subsidy. If this is also the thinking of our policymakers, then it would leave one shell shocked as it would be tantamount to a complete reversal of the process set in motion a couple of years ago. In FY17, the government launched pilot projects for linking subsidy payments to producers, for the sale of fertilisers to farmers by retailers...
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Category: Nutrient Based Scheme (NBS) for P & K
Opt for a reformist approach
The Government’s failure to bring a comprehensive set of reforms for the fertiliser sector is a missed opportunity. Glaring anomalies need to be fixed to harness long-term potential. Having returned to power for a second term with a thumping majority, it was expected of the Modi Government to kick off immediate reforms for the fertiliser sector. Being just the beginning of the five-year term, now is the golden opportunity for it to opt for big bang reforms as any adverse fall-out in the short-run (inevitable when harsh measures are implemented) won’t pose any threat to the Government. Alas, it missed the opportunity. Finance Minister Nirmala Sitharaman’s Budget, too, had no mention whatsoever of substantive issues pertaining to the fertiliser policy even as...
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Modi 2.0 fails to kick off fertilizer reforms
Having been returned to power, we were looking forward to Modi kick off reforms in the fertilizer sector which were ignored by successive governments in the past. The expectation was legitimate as any reform measure is bound to affect stakeholders in the immediate short-run but that is unlikely to pose any threat to the government which has a mandate to run for full five years and it does not have to face the electorate before this. So, now was the golden moment to go for the big bang. But, the union budget presented by finance minister, Nirmala Sitharaman on July 5, 2019 has belied the expectation. There is no reference to fertilizers even as the allocation for fertilizer subsidy at...
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Direct action needed for direct benefits
In its present form, the fertiliser DBT scheme has many loopholes. In the interest of the farmers, the policy needs an overhaul so that they can put subsidy to best use and enhance fertiliser-use efficiency. Will the new Government have the will to do so? The Ministry of Finance and NITI Aayog are working towards preparing a roadmap to directly transfer fertiliser subsidy to the farmers. The data being used to give Rs 6,000 per year to 120 million small and marginal farmers under the Pradhan Mantri Kisan Samman Nidhi will be used for this purpose. The subsidies on fertilisers along with PM Kisan deposits will serve to give a quasi-universal basic income transfer to the farmers. The proposal will be put...
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Fertilizer reforms – Modi’s report card
The term of the Modi – government will come to an end in a little over two months from now. It is time to take stock of what it has done to the fertilizer sector which was suffering from several policy weaknesses at the time it took charge and there was great deal of expectation that it would kick off major reform. The four major areas which needed focused attention were (i) control on all critical aspects hampering initiatives by manufacturers to reduce cost, improve efficiency and innovate; (ii) imbalance in fertilizer use affecting crop yield, soil health, environment and sustainability of agriculture; (iii) shortfall in supply of gas, feedstock/fuel in production and high price; (iv) increasing subsidy and its...
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Fertilizer tantrums, farmers’ woes
The woes of farmers refuse to go away. This time around, the steep increase in price of fertilizers – key input used in crop production – during the current year has increased their miseries. During Kharif [April-September] 2018, the price of di-ammonium phosphate [DAP] – a major source of ‘phosphate’ or ‘P’ nutrient supply – increased by 30% over Kharif [April-September] 2017. Likewise, the price of complexes and muriate of potash [MoP] – main source of ‘phosphate’ and ‘potash’ or ‘K’ nutrient – increased by 15-60% during Kharif 2018 over Kharif 2017. The escalating trend has continued during Rabi [October 2018-March 2019] season as well. The price of DAP has increased by a further 12-13% during Rabi [Oct 18-March 19]...
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Soil health: change NPK balance through incentives
Delivering the 38th edition of his ‘Mann ki Baat’, Prime Minister Narendra Modi said, “Can our farmers take a pledge to bring down urea use by half by 2022? If they use less urea in agriculture, the fertility of the land will increase. The lives of farmers will start improving.” Modi made the statement in the backdrop of ‘World Soil Day’ on December 5 and the deteriorating health of soil the world over, a key factor contributing to this being the excessive use of urea. The positive correlation between excessive use of urea and the erosion in soil health is an incontrovertible fact proven by several studies and finds repeated reference in official documents, including the Economic Survey that is...
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DBT for fertilizers – shun flawed mechanism
Alluding to direct benefit transfer [DBT] of fertilizer subsidy, in budget speech for 2016-17, finance minister, Arun Jaitely had stated :- “We have already introduced DBT in LPG. Based on this successful experience, we propose to introduce DBT on pilot basis for fertilizer in few districts in the country with a view to improving quality of service delivery to the farmers.” As a follow up, DBT of fertilizer subsidy is now in operation on a pilot basis in 11 districts viz. West Godavari, Krishna and Rangareddi [Andhra Pradesh]; Una [Himachal Pradesh]; Hoshangabad [Madhya Pradesh], Pali [Rajasthan], Krishnaganj [Bihar], Karnal and Kurukshetra [Haryana]; Nashik and Raigarh [Maharashtra] From the next kharif season beginning April, 2017, the scheme will be launched in...
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Fertilizer DBT ‘pilots’ – old wine in new bottle
Even as Modi – government has taken plenty of action on reforming a variety of subsidy schemes viz., LPG, food, kerosene etc during the last 30 months of its stint, fertilizer subsidy has received scant attention. In his budget speech for 2016-17, finance minister, Arun Jaitely stated :- “We have already introduced a direct benefit transfer (DBT) in LPG. Based on this successful experience, we propose to introduce DBT on pilot basis for fertilizer in few districts in the country with a view to improving quality of service delivery to the farmers.” The focus on DBT links up with a startling revelation made in the Economic Survey [2015-16]. It stated that “24% of the fertilizer subsidy is spent on inefficient...
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Fertilizer woes – quick fix won’t work
On July 4, 2016, the minister for chemicals and fertilizers, Ananth Kumar announced government’s decision to reduce maximum retail price [MRP] of non-urea fertilizers viz., DAP [di-ammonium phosphate: 18% nitrogen [N] & 46% phosphate [P]]; MOP [muriate of potash] [60% potash [K]] and complex fertilizers [contain N, P and K in different proportions] with immediate effect. The retail price of DAP has been reduced by Rs 2,500 per ton to Rs 22,000/tonne, MOP by Rs 5,000 per ton to Rs 11,000/tonne and those of complex fertilizers by Rs 1,000/tonne on an average. The minister went on to say that the rate cut would entail a benefit of Rs 4,500 crore to farmers and help promote balanced use of fertilizers. On...
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