Govt proposes direct subsidy on fertilizers to farmers

MoS for Chemicals & Fertilizers Hansraj Gangaram Ahir says that the government proposes direct fertiliser subsidy transfer to farmers’ bank account
Govt proposes direct subsidy on fertilizers to farmers

Replying a query in the Lok Sabha Minister of State( MoS) Chemicals and Fertilisers Hansraj Gangaram Ahir said that the government plans to introduce direct subsidy on fertilisers to farmers. However, a major challenge in operationalizing this scheme lies in identification of beneficiary farmers as in many states the land records are neither accurate nor updated.

“Therefore, the Department of Fertilizers plans to have a phased approach and prepare a road map for pilot project in select districts to capture the details/identity proof of buyer’s (Aadhaar Number/ Land Details) at retail fertilizer stores in order to build a comprehensive database of beneficiary farmers over a period of time,” Ahir said.

The department has recently issued a notification whereby it has been made mandatory for all the indigenous producers of urea to produce 100 percent as Neem Coated Urea (NCU). “Since NCU cannot be used for industrial purposes, illegal diversion of subsidized urea to non-agricultural uses would not be possible. By curbing this illegal diversion of Urea for non-agricultural purposes, the Government aims to prevent the subsidy leakages,” the Minister said.

The government has put in place a mechanism to keep prices of P&K fertilizers at reasonable rates. Firstly, it has been made mandatory for the fertilizer companies to submit, the cost data of their fertilizer products from 2012-13 onwards in prescribed format on six monthly basis. The Department has also appointed Cost Accountants/Firms to scrutinize the said cost data to ensure that the prices fixed by the fertilizers companies are reasonable.

Secondly, it has also been stipulated in the provisions that in cases, where after scrutiny, unreasonableness of MRP is established or where there is no correlation between the cost of production or acquisition and the MRP printed on the bags, the subsidy would be restricted or denied even if the product is otherwise eligible for subsidy under NBS Scheme. In proven case of abuse of subsidy mechanism, the Department of Fertilizers, on the recommendation of Inter-Ministerial Committee may exclude any grade/grades of fertilizers of a particular company or the fertilizer company itself from the NBS Scheme.

The department has taken some steps to meet the requirement of fertilizers to the farmers in all State/UTs. The month-wise demand is assessed and projected by the Department of Agriculture & Co-operation (DAC) in consultation with the State Governments before commencement of each cropping season. On the basis of month-wise and state-wise projection given by the DAC, Department of Fertilizers allocates sufficient/adequate quantities of fertilizers to States by issuing monthly supply plan and continuously monitors the availability.

The Minister said that a monitoring mechanism is also put in place and the movement of all major subsidized fertilizers is being monitored throughout the country by an on-line web based monitoring system( also called as Fertilizer Monitoring System (FMS). The state governments are regularly advised to coordinate with manufacturers and importers of fertilizers for streamlining the supplies through timely placement of indents for railway rakes through their state institutional agencies like Markfed etc.

Ahir also said that the gap in the demand and domestic production of fertilizer is met through imports.The availability of all the fertilizers in almost all the states is adequate.

The department has issued New Urea Policy 2015 on May25, 2015 with twin objectives of maximizing indigenous urea production and promoting energy efficiency in the urea units to reduce the subsidy burden on the government.

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