Centre ‘doubles’ fertilizer subsidy as prices see a surge

Considering the huge increase in the prices of fertilizers in global market, the Centre has ‘doubled’ the fertilizer subsidy for this rabi season. A meeting of the Union Cabinet here on Wednesday approved a subsidy of ₹51,875 crore to Nitrogen (N), Phosphorus (P), Potash (K) and Sulphur (S) for Phosphatic and Potassic (P&K) fertilizers for the ongoing rabi season.

From the budget estimate of ₹21,000 crore of nutrient-based subsidy, the amount has been more than doubled, said Union Minister for Fertilizers and Chemicals Mansukh Mandaviya. Briefing reporters after the meeting, he said the Centre revised the subsidy keeping the increasing market prices in mind.

‘Highest so far’

He said the total fertilizer subsidy for the rabi season, including ₹80,000 crore for urea, would be ₹1,38,875 crore and for both the rabi and kharif, the subsidy amount would be ₹2.25 lakh crore. “This is the highest subsidy so far. Last year it was ₹1.65 lakh crore,” Mr. Mandaviya said and added that as commercial prices had doubled due to the Ukraine-Russia conflict and the logistics issues due to pandemic the Centre decided to double the subsidy component too. “Increased prices would have burdened the farmers. We have ensured that there will not be any increase in the fertilizer prices in the next six months,” he said.

Mr. Mandaviya said a bag of Diammonium Phosphate cost ₹1,350 and it would have been cost ₹2,650 without subsidy. On urea, he said, the subsidy was around ₹2,400 per bag as a bag was being sold for about ₹266 instead of the market price, which was ₹2,700.

He added that the Centre had taken up measures to increase production of urea in the country. While the requirement was 350 lakh metric tonnes (LMT), the production in the country was 250 LMT. He said four new plants were coming up and nano urea would also replace the use of urea slowly. Mr. Mandaviya said the country had enough stock of fertilizers for this season and reports about farmers queueing up to buy fertilizers were blown out of proportion.

The Centre said the move would help the farmers. “This will enable smooth availability of all P&K fertilizers to the farmers during rabi 2022-23 at the subsidised / affordable prices and support the agriculture sector. The volatility in the international prices of fertilizers and raw materials has been primarily absorbed by the Union government,” a government release said.