Centre approves ₹22,303-cr. subsidy on key fertilizers
Context
The government said on Wednesday that farmers will continue to receive the essential soil nutrient DAP (di-ammonium phosphate) at the previous rate of ₹1,350 per bag (50 kg) and that they would receive a ₹22,303-crore subsidy on phosphatic and potassic (P&K) fertilizers for the current rabi season.
What are the Rabi Crops?
- Rabi crops are winter-planted and spring-harvested crops. The Arabic word “Rabi” means “spring” in English. Typically, the Rabi season begins in November.
- Wheat, barley, oats, gram, and rapeseed (mustard, linseed, green peas, sunflower, coriander, and cumin) are a few types of Rabi crops grown in India.
- Rabi crops need a cold environment to flourish and a warm environment for seed germination.
- The world’s second-largest producer of wheat is India.
- Because they are ripe early, peas are harvested early. Green peas are abundant in Indian marketplaces from January to March, with a peak production in February.
What are the subsidies introduced by the government during the Rabi Season?
- DAP (Di-Ammonium Phosphate) Subsidy: The government continued to provide a subsidy on DAP, a crucial phosphatic fertilizer. Farmers will be able to purchase DAP at the old rate of ₹1,350 per bag (50 kg), thanks to this subsidy.
- NPK (Nitrogen, Phosphorus, Potassium) Subsidy: NPK fertilizers, which contain a combination of these essential nutrients, were made available at the old rate of ₹1,470 per bag with the government’s subsidy.
- SSP (Single Super Phosphate) Subsidy: Single super phosphate, another phosphatic fertilizer, was subsidized, and farmers could purchase it at around ₹500 per bag.
- MoP (Muriate of Potash) Subsidy: The subsidy rate for MoP was reduced, making it available to farmers at ₹1,655 per bag, down from the previous rate of ₹1,700 per bag.
What are the benefits of having subsidies for the fertilizers?
- Agricultural Productivity: Farmers are encouraged to employ vital nutrients like potassium, phosphate, and nitrogen in their fields via fertilizer subsidies. Thus, crop yields, soil fertility, and overall agricultural productivity are all improved.
- Food Security: By guaranteeing a steady and adequate supply of food for the populace, increased agricultural output brought about by fertilizer subsidies helps to ensure food security. This is particularly crucial in a nation like India, where the population is enormous and still expanding.
- Income Generation: Farmers may see a rise in income as a result of higher crop yields brought about by subsidized fertilizers. This can thereby raise their standard of living and lessen rural poverty.
- Decreased Price Volatility: Farmers’ input costs are stabilized in part by fertilizer subsidies. Subsidies can ease the financial strain on farmers during periods of high fertilizer costs, giving them greater confidence to plan and make investments.
- Crop diversification: Because subsidies allow farmers to experiment with different fertilizers for different crops, they can encourage farmers to diversify their crop production. A more resilient and balanced agricultural system may result from this.
What are the drawbacks of giving subsidies to fertilizers?
- Misallocation of Resources: The fertilizer market can be distorted by subsidies, which can result in the misallocation of resources. Inappropriate or excessive use of subsidized fertilizers by farmers, whether by overapplication or improper soil testing and analysis, can have a negative impact on crop quality and the environment.
- Over-dependence on Chemical Fertilizers: At the expense of organic or sustainable agricultural methods, fertilizer subsidies may promote an overreliance on chemical fertilizers. Degradation of the soil and a decrease in soil fertility over time may result from this.
- Environmental Impact: Overuse of fertilizers caused by subsidies can lead to water pollution, nutrient runoff, and ecological harm. Problems like algal blooms and “dead zones” in water bodies can be caused by nutrient contamination.
- Budgetary Strain: Governments may face severe financial strain as a result of fertilizer subsidies, which take funds away from other vital areas like infrastructure, healthcare, and education.
- Market Distortion: By altering the dynamics of supply and demand, subsidies have the potential to distort the fertilizer market. This may affect investments made by the private sector in the fertilizer business and result in production and distribution inefficiencies.
Conclusion
The goal of these subsidies is to lower the cost of necessary fertilizers for farmers, particularly during the Rabi season when they need these inputs for cultivation and seeding. Support from the government in the form of these subsidies is essential to maintaining India’s agricultural output and guaranteeing food security.
