Updated: June 17, 2021 5:46:48 am
MOVING TO provide relief to farmers amid the Covid crisis, the Union Cabinet Wednesday cleared the decision to increase subsidy for di-ammonium phosphate (DAP) fertilisers from Rs 500 to Rs 1,200 for a 50-kg bag, and approved nutrient-based subsidy rates for P&K (phosphate and potassic) fertilisers for 2021-22 till the present kharif season.
An official statement issued after a Union Cabinet meeting said that the “Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has approved the proposal of the Department of Fertilizers”.
The approved rates will be effective from the date of notification, which was issued on May 20. “The estimated additional subsidy burden for such an arrangement will be around Rs 14,775 crore,” the Government said.
The subsidy rates for nutrient nitrogen (N), potash (K) and sulphur (S) have been kept at last year’s levels of Rs 18.78 per kg, Rs 10.11 per kg and Rs 2.37 per kg respectively. However, the subsidy rate for phosphorus (P) has been tripled to Rs 45.32 per kg from Rs 14.88 per kg last year.
The Government said it “has already announced various special packages considering the hardships faced by people” during Covid. It said the decision to increase the subsidy rates was taken “in a similar manner, considering this crisis of pricing of DAP in India as an extraordinary situation and distress for the farmers”.
The move comes at a time when farmers, mainly from Punjab, have continued their agitation at Delhi’s borders against the Centre’s new farm laws.
The Government said that the decision has been taken “as a one-time measure as (part of the) Covid package to reduce the hardships of farmers”. It “may review the situation”, given the anticipation “that international prices may come down in a few months”, the statement said.
“In last few months, the international prices of raw materials of DAP and other P&K fertilizers have increased sharply… Government is fully sensitive to the concerns of farmers also and is already taking steps to tackle the situation so that the farming community can be saved from the effects of this price rise of P&K fertilisers (including DAP),” the statement said.
“Accordingly, as a first step, Government has already directed all the fertiliser companies to ensure the sufficient availability of these fertilisers in the market for farmers…On the pricing front of DAP, Government has already asked all the fertiliser companies to sell their old stocks of DAP etc. at the old prices only,” it said.
Union Minister of State for Chemicals & Fertilisers Mansukh Mandaviya said that the Government “is already incurring an expenditure of Rs 80,000 crore per annum, this amount, Rs 14,775 crore, will be additional”.
According to Mandaviya, this is the first time that fertiliser subsidy has been hiked so much in a year. “Farmers will benefit from this decision as they will continue to get DAP fertilisers and will not have to spend more. If the prices in the international market fall, then we can reduce the subsidy. When international prices went up, we took care of farmers to reduce the burden on them,” he said.
The latest move comes after fertiliser companies announced a sharp hike in DAP prices. On April 8, Indian Farmers Fertiliser Cooperative (IFFCO) had raised the maximum retail price of a 50-kg DAP bag by 58 per cent — from Rs 1,200 to Rs 1,900 per bag. At the time, the Centre had urged the fertiliser industry to maintain retail prices of DAP at “reasonable” levels.
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