There would be more cheer for the farmer in the Budget. The UPA Government plans to pump an extra Rs 1,300 crore as subsidy for complex fertilisers and single super phosphate from next fiscal year (April 2008-March 2009).Following instruction from the Prime Minister, the Group of Ministers is meeting just days before the Budget to approve the shift to a nutrient-based subsidy regime for fertilisers to bring about a balanced use in the field.On the anvil is a Rs 1,200-crore subsidy on 11 grades of Complexes—fertilisers which are a mix of nitrogen (N), phosphorous (P) and potassium (K)—to lower their retail prices and encourage their consumption.Also proposed is the inclusion of sulphur among subsidised nutrients N, P and K with an increased subsidy of Rs 1350 per tonne, up from present ad-hoc concession of Rs 1,125. The inclusion, to cost an extra Rs 100 crore in the Budget, has been proposed to encourage SSP production from lower grades of rock phosphate available in the country to substitute di-ammonium phosphate (DAP) for which phosphates and phosphoric acid are imported.All this while the subsidy on N, P and K would remain unchanged with nutrient costs derived from urea, imported DAP and imported muriate of potash, respectively. Moreover, their delivered costs would continue to be worked out through the present cost-plus mechanism.“The final model represents nothing else except a proposal for reducing prices of Complexes after brining nutrient prices of N, P and K at par with other sources that is urea, DAP and MOP,” says the Finance Ministry which supports the shift to nutrient-based subsidy but opposes the subsidy basket remaining unaltered.“The proposal of Department of Fertilisers does not open up the subsidy basket, will not encourage crop and soil-specific fertilisation, will only marginally improve balanced fertilisation and end up increasing the subsidy burden while continuing India’s exploitation by international trading/manufacturing cartels,” it said on the proposal.With the Government currently subsidising more than 50 per cent of the total cost of fertilisers, the product-based subsidy has encouraged the increased use of heavily-subsidised urea while neglecting other nutrients. This has resulted in soil fatigue where there is a gradual decline in the response ratio of fertilisers.Besides, the GoM would also decide on recognising subsidy for fertilisers coated with micro-nutrients such as iron, zinc, copper, boron and manganese. “The cost of coating would be recovered from the farmers within a certain percentage of the retail price along with a cap on the percentage of fertilisers to be fortified, says the proposal.Micro-nutrient production, presently reserved for small sector, would be opened up for manufacture by fertiliser industry to ensure quality and availability. The micro-nutrients are required in small quantities but provide effective and efficient plant growth.
