Agri Business

New nutrient subsidy of phosphatic fertilisers goes up by three times

Our Bureau New Delhi | Updated on June 16, 2021

Cabinet approves additional ₹14,775 crore; hikes DAP fertiliser subsidy by ₹700 per bag

The nutrient-based subsidy (NBS) available to phosphatic fertilisers in the country has gone by more than three times to factor in the exponential increase in the coast of imported raw materials required to make them, while that for nitrogen, potassium and sulphur remained the same as last year.

As per the Ministry of Chemicals and Fertilisers’ proposal, approved by the Cabinet Committee on Economic Affairs on Wednesday, the subsidy component of P-fertilisers would be ₹45.323 per kg, while NBS for nitrogen, potassium and sulphur would remain at ₹18.789, ₹10.116 and ₹2.374 respectively, an official statement said.

The government makes available fertilisers, namely Urea and 22 grades of P&K fertilisers (including DAP) to farmers at subsidised prices through fertiliser manufacturers or importers. The subsidy on P&K fertilisers is governed by the NBS Scheme since 2010.

The subsidy is released to fertiliser companies as per NBS rates so that they can make available fertilisers to farmers at affordable prices.

In the last few months, the international prices of raw materials of DAP and other P&K fertilisers have increased sharply. As a result, prices of finished DAP in international market have also increased accordingly.

However, the government intervened and told the fertiliser companies to sell their old stocks of DAP fertilisers at old prices. Subsequently, the government also increased the subsidy available for DAP to ₹1,700 per bag from ₹500 a bag. This resulted in fertiliser companies selling DAP at the same rate of ₹1,200 per bag to farmers. The estimated additional subsidy burden on account of increased DAP subsidy is around ₹14,775 crore.

Published on June 16, 2021

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