Fertilizer subsidy in India

(Fertilizer’s subsidy in India is a difference between the production price of fertilizers and the price it is available for consumers.)

Application of fertilizers was popularised in our country during the Green Revolution of the 1960s and the 1970s. Fertilizer’s subsidy in India is a difference between the production price of fertilizers and the price it is available for consumers.

Application of fertilizers was popularised in our country during the Green Revolution of the 1960s and the 1970s. Fertilizer’s subsidy in India is a difference between the production price of fertilizers and the price it is available for consumers. The total fertilizer subsidy in 2017-18 has been pegged at Rs. 70,000 crore. Out of this, subsidy for imported urea is pegged at Rs. 12,300 crore, domestic urea is Rs 31,000 crore and sale of de-controlled fertilizers (like phosphatic & potassic fertilizers) is Rs. 24,670 crore. Subsidy on urea, potassium and phosphorus and nitrogen is provided by the government to the farmers, mainly to improve the crop production. Different percentage of subsidy on MRP is provided on urea and P&K fertilizers. The MRP of urea is statutorily fixed by the Government of India and it is Rs. 5360/- per MT (exclusive of the Central/State Taxes), which includes Rs. 180/MT as dealer margin for private traders/PSUs & Rs. 200/MT for Co-operatives and Rs. 50/MT to retailers for acknowledging the receipt and reporting the stock in mFMS (iFMS) as additional incentive. An extra MRP of 5 % (of Rs. 5360/- per MT) is charged by fertilizer manufacturing entities on Neem Coated Urea. Therefore, the retail price of urea is fixed at Rs.5628 per tonne on 25th May, 2015. The Nutrient Based Subsidy rates for N, P, K and S were fixed at rate of 64.51 (April) to 65.02(December) INR per US $ for 2017-18. Whereas NBS rates for DAP has been fixed at Rs.2166 per tonee, and MOP Rs.7437 per tonne for 2017-18. The cost benefit ratio of fertilizers to food grains depends upon the selling price of fertilizers and market prices of grains. The objective of the government is to support the farmers but the question is exactly how much of that really goes to the pocket of the farmers and how much is taken by the companies. The benefit of these subsidies have never touched small and marginal farmers and the beneficiaries is partially provided to the large farmers sometimes. Thus, the initial purpose of subsidy schemes doesn’t seem to be causing any profit to the actual needier. To improve this scenario much popular attention has been given to the issue. The Prime Minister has announced double farmers income, currently estimated at Rs.77,976 and government has been using its 30% of total subsidy on food and fuel. However, one of the reason behind its downfall are the brokers who have exploited the market rate, as recently seen in MP where 45 kg bag of urea cost Rs.250 and farmer gets it in credit when they purchase it from the cooperative society, but private traders are selling it at Rs.450 per bag and there is nobody to check it. Thus, government or manufacturing company is not responsible as a whole and attention must be laid on exploitation by private traders in the market. The government should keep an eye on fertilizer market and also provide the subsidy rate to the companies on time so that the profit earning must be stable and the fertilizer companies can be secured from crises. Other than this it is also the responsibility of the farmer to consume these fertilizers judiciously, because the actual production cost of them are really high.

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How Farmers Get Subsidy In India

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