Government’s April 1 gift to farmers

Monday 15 March 2010

imageOn february 18, the Centre announced nutrient-based subsidies (NBS) for fertilizers as promised in last year’s budget. Now individual nutrients in the fertilizer like nitrogen will be subsidized, rather than the end product. The new system will be effective from April 1.

The government will control only urea’s retail price; its price has been hiked from Rs 4,830 to Rs 5,310 per tonne from April 1.
   
“The nbs regime is expected to promote balanced fertilization and increase agricultural productivity,” said information and broadcasting minister, Ambika Soni. An inter-ministerial committee under the secretary of the fertilizer ministry will finalize the subsidy on each nutrient—nitrogen, potassium, phosphorous and sulphur. Fertilizers containing these nutrients will get additional per tonne subsidy if they include secondary and micro-nutrients.

The fertilizer industry is happy. The new policy gives incentives to manufacturers to fortify fertilizers with micro-nutrients to reduce their deficiencies, said U S Awasthi, managing director of Indian Farmers’ Fertlizer Cooperative Limited. But G V Ramajaneyulu of the non-profit Centre for Sustainable Agriculture in Hyderabad said NBS would only decrease the price of complex fertilizers which are more expensive and would be used only by big farmers. “The rates of main fertilizers like dap will increase,” he said. Small and medium farmers and those who want to use bio-fertilizers won’t benefit.

“Subsidies should be given to farmers, not the industry,” said Yudhveer Singh of Bharatiya Kisan Union. The policy is meaningless for two-thirds of India nfarmers who are in rainfed areas.

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