Govt clears Rs 3.70 lakh crore agri package, urea subsidy to stay until March 2025

Briefing reporters after the meeting of the Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi, Union Minister for Chemicals and Fertilisers, Mansukh Mandaviya, said the decision to continue the urea subsidy scheme would ensure the availability of fertiliser to the farmers at the same price of Rs 242/45 kg bag, excluding taxes and neem coating charges.

Union Ministers Anurag Thakur and Mansukh Mandaviya addressing a press conference after the Cabinet meeting today. (PTI photo)

Farmers don’t need to spend anything extra for the purchase of urea, which will help moderate their input costs, said Mandaviya. The initiatives announced under the package will boost farmers’ income, strengthen natural and organic farming, rejuvenate soil productivity and ensure food security, he said.

According to an official statement, the maximum retail price of urea is currently Rs 242/ 45 kg bag, excluding neem-coating charges and taxes, whereas the actual cost works out to about Rs 2,200 per bag.

According to the statement, the country’s indigenous production of urea has increased from 225 LMT in 2014-15 to 250 LMT in 2021-22. In 2022-23, production was increased to 284 LMT. That, along with newly set-up nano urea plants, will reduce import dependence and make India self-sufficient by 2025- 26, it said.

The Centre has increased the fertiliser subsidy outgo from Rs 73,067 crore in 2014-15 to Rs 2,54,799 crore in 2022-23. This has come on the back of spiralling global prices of fertilisers as well as its intermediates and raw material prices.

Under PM-PRANAM, Rs 1,451.84 crore has been approved for Market Development Assistance (MDA) to promote organic fertilisers from gobardhan (biogas) plants. The MDA scheme entails an incentive of Rs 1,500 per MT to support the marketing of organic fertilisers, including fermented organic manures (FOM), liquid FOM, and phosphate-rich organic manures, which are a by-product of biogas plants and compressed biogas plants set up under the umbrella of the GOBARdhan initiative.

Such organic fertilisers would be branded as ‘Bharat’, and will help address the challenge of management of crop residue and problems of stubble burning, while also offering an additional source of income for farmers, the government said. This initiative will also facilitate the implementation of the Budget announcement of establishing 500 new waste-to-wealth plants under the GOBARdhan scheme for promoting a circular economy, by increasing the viability of these plants.

Another initiative included in the package comprises the introduction of sulphur-coated urea, which is more economical than the neem-coated urea that is currently in use. While addressing sulphur deficiency in the soil, it will also save input costs for the farmers and raise their income, the government said.

The Centre also announced a Rs 10 per quintal hike in sugarcane FRP (fair and remunerative price), which is the minimum price that mills have to pay to sugarcane growers. The FRP of sugarcane has been fixed at Rs 315 per quintal for the 2023-24 season starting October, up 3.28 per cent from the current 2022-23 marketing year (October-September).

“The Cabinet has increased the FRP of sugarcane to Rs 315 per quintal for 2023-24. Last year, FRP of sugarcane was Rs 305 per quintal,” Information and Broadcasting Minister Anurag Thakur said, adding that the PM has always been with the “annadata” and the government has given priority to agriculture and the farmers.