Lok Sabha Question No. 1747 (UNSTARRED), answered on 2022-02-11
Subject: Impact of Subsidies on Fertilizers
Ministry: CHEMICALS AND FERTILIZERS
Asked by: Amar Singh

## GOVERNMENT OF INDIA MINISTRY OF CHEMICALS AND FERTILIZERS DEPARTMENT OF FERTILIZERS

## LOK SABHA

UNSTARRED QUESTION NO\_ 1747 TO BE ANSWERED ON : 11.02.2022

## Impact of Subsidies on Fertilizer

## 1747 DR; AMAR SINGH:

Will the Minister of CHEMICALS AND FERTILIZERS be pleased to state:

- (a) ensure that private companies disclose their exact production capacities of fertilizers in order to receive requisite subsidy;
- (b) whether the Government has conducted any survey during the last three years for assessing the impact of subsidies on fertilizers for farmers , if sO, the details and findings thereof, State/UT-wise;
- (c) the details of steps taken by the Government during COVID-19 Iockdown to ensure access to subsidized fertilizers by small and marginal farmers in the States and UTs; and
- (d) the details of farmers who are benefitted by fertilizer subsidies during the last three years, year-wise and State/UT-wise?

## ANSWER

## MINISTER FOR HEALTH & FAMILY WELFARE AND CHEMICALS & FERTILIZERS (DR. MANSUKH MANDAVIYA)

(a) Sir , P&k fertilizers under the Nutrient are decontrolled. Under the policy, a fixed amount of subsidy, decided on annual basis, is provided on subsidized P&K fertilizers depending on their nutrient content. Under this policy, MRP is fixed by  fertilizer   companies as per market   dynamics at reasonable level which is monitored by the Government:

In case of urea, the Re-assessed Capacity (RAC) i.e. the capacity of urea manufacturing units has been determined by the Department of Fertilizers.

- (b) Yes a third party evaluation of the urea subsidy scheme and Nutrient Based Subsidy (NBS) scheme was undertaken by the Department of Fertilizers for the purpose of the continuation of these schemes beyond March, 2021. The major findings of the said study are annexed at Annexure 1. Sir, 31st
- (c): During COVID-19 phase, the following steps were taken by the Department of fertilizers to ensure comfortable availability of Fertilizers in all the States:-
- raw materials and finished fertilizers  prices in the international market and accordingly notified NBS subsidy rates twice on 20.05.2021 and on 13.10.2021 in order to control the prices of fertilizers. The subsidy rates during FY 2021-22 is as under:

| S No_   | Nutrients   | NBS (Rs. Per of Nutrient Kg   | NBS (Rs. Per of Nutrient Kg   |
|---------|-------------|-------------------------------|-------------------------------|
|         |             | 01.4.2021 to 19.5.2021        | 20.05.2021 to 31.3.2022       |
|         | N           | 18.789                        | 18.789                        |
| 2       | P           | 14.888                        | 45.323                        |
| 3       | K           | 10.116                        | 10.116                        |
|         | S           | 2.374                         | 2.374                         |

Besides, Special one-time package with an additional subsidy for the to 31.03.2022 has been given:

| S No.   | Name of Fertilizers   |   rates fixed for the same period (in Rs IMT) |
|---------|-----------------------|-----------------------------------------------|
| 1_      | DAP 18-46-0-0         |                                          8769 |
| 2       | NPK 20-20-0-13        |                                          2000 |
| 3,      | NPK 10-26-26-0        |                                          2000 |
| 4       | NPK 12-32-16          |                                          2000 |

This subsidy increase on P&K fertilizer under NBS scheme was to help in making P&K fertilizers available at affordable prices to farming community.

- ii\_ Assessment of field requirement in consultation with the states and accordingly, the district wise micro planning on daily basis.
- 24x7 interactions with the state   governments,  companies and railways through web platformslcontrol room.
- iv Sensitization of the stake holders viz, manufacturers, ports, railways to operate on maximum capacity to produce load, and move the fertilizers to the targeted destinations.
- V\_ State Governments impressed upon to use i-FMS dashboard stock figures for district wise stock availability and suitable interventions. Closely monitoring rake movement:
- vi. Monitoring loading and voyage time of imported fertilizer shipments on daily basis and making required suitable interventions have been made from time
- Close monitoring 24x7 and regular interaction with states, fertilizer companies and railway board is executed in a targeted manner SO as to address the field demand suitably.
- (d): Number of buyer's benefitted under DBT during the last three years, wise and State/UT wise is annexed at Annexure year-

## XXXXXXXX

- (1) The study noticed that Urea Subsidy Scheme has a great impact on agricultural sector in increasing crop yield and reducing the expenditure of farmers for cultivation. Also, it was noticed that due to the scheme, most farmers their full requirement of urea, of good quality and in time. Because of the success of the scheme, there is improvement in energy efficiency of urea industries. Thus, there is the necessity for continuation of the urea subsidy scheme to help the urea industries, farmers, and the agriculture sector: get
- (2) Majority of the surveyed farmers suggested for the continuation of urea subsidy scheme in the future:
- (3) Study has revealed that most of the farmers have the knowledge that urea bags are provided to them at subsidized rate. Further; due to urea subsidy scheme, most of the farmers their full requirement of urea and of good quality: The study observed that urea subsidy scheme has increased crop  yield and reduced the   expenditure of  farmers for cultivation\_ Majority of farmers feel that there are benefits after the availability of the neem coated urea. Also, due to availability of 45 kg urea bag in place of 50 kg 50% farmers are using less amount of urea in cultivation; get bag,
- (4) Since there is need to continue subsidizing the urea for the farmers, the subsidy amount to the manufacturing/ importing companies should be given as per the current policy.
- (5) There is very little knowledge and understanding available with the farmers on the use of appropriate amount of urea in view of the soil conditions as well as the cropping patterns. Thus, awareness programmes may be conducted in the villages to aware the farmers about the soil testing and balanced use of urea.

## Major Finding by third party on Nutrient Based Subsidy (NBS) scheme

1. The continuation of NBS   scheme is necessary and the objective of 'availability at subsidized reasonable price' has been met; though some constraints Iike decreasing subsidy on NBS products and keeping constant pricing of Urea results in overall decrease in the demand and consumption of NBS products.
2. It is strongly felt that the entire industry needs to be decontrolled as soon as possible so as to realize the full potential.
3. Special package needs to be provided to augment the manufacturing facilities so as to reduce the import dependency.
4. 4 . DoF should take measures to encourage and enhance investment in the fertilizer sector in close coordination with Ministry of Finance, even if a onetime   special incentive package is to be designed for  setting new manufacturing facilities
5. Leave open MRP to be fixed by fertilizer  manufacturerlimporter at a reasonable level and make availability of P&K fertilizers to farmers and at affordable prices.
6. More and easily accessible Soil testing facilities should be provided for periodic soil testing:
7. 7 . Transportation cost is very high to bring fertilizers from retailerldistributor to rural areas, something needs to be done.
8. 8 , Till the time the subsidy regime is done away with, DA&FWIDoF may establish a mechanism to ensure the requirement of fertilizers is assessed in advance based on month-wise and State-wise demand of fertilizers projected by DA&FW and Co-ordinate the arrangements for supplying the required quantities of fertilizers.

## ANNEXURE II

| No   | State Nam                   | Adhaar Buyer Count   | FY 2019- 2020 Adhaar Buyer Count   | FY 2020- 2021 Adhaar Buyer Count   |   FY 2021-2022 st (Upto 31 Jan: 2022) |
|------|-----------------------------|----------------------|------------------------------------|------------------------------------|---------------------------------------|
| 1    | Andaman and Nicobar Islands |                      |                                    | 3371                               |                                  6385 |
| 2    | Andhra Pradesh              | 1093405              | 1155618                            | 1820887                            |                               2120071 |
| 3    | Assam                       |                      | 0                                  | 9042                               |                                 37198 |
| 4    | Bihar                       | 2603833              | 1660989                            | 4421794                            |                               7843119 |
| 5    | Chhattisgarh                | 967164               | 816639                             | 951207                             |                               1445933 |
|      | Dadra and Nagar Haveli      | 870                  | 1286                               | 1109                               |                                  3023 |
| 7    | Delhi                       | 8626                 | 10006                              | 14600                              |                                 15318 |
| 8    | Goa                         | 27172                | 14250                              | 28142                              |                                 33939 |
| 9    | Gujarat                     | 1651775              | 1975344                            | 2949377                            |                               3117862 |
| 10   | Haryana                     | 719545               | 555500                             | 1058873                            |                               1644000 |
| 11   | Himachal Pradesh            | 160835               | 146577                             | 161393                             |                                206890 |
| 12   | Jammu and Kashmir           | 0                    | 0                                  | 102013                             |                                143628 |
| 13   | Jharkhand                   | 373921               | 195661                             | 595679                             |                               1019091 |
| 14   | Karnataka                   | 927417               | 693493                             | 1371549                            |                               2351601 |
| 15   | Kerala                      | 304255               |                                    | 281336                             |                                321086 |
| 16   | Madhya Pradesh              | 1211608              |                                    | 3533096                            |                               5144032 |
| 17   | Maharashtra                 | 2645152              | 2542858                            | 3034481                            |                               4699300 |
| 18   | Manipur                     |                      | 624                                | 2029                               |                                  8550 |
| 19   | Mizoram                     | 284                  | 1094                               | 573                                |                                   485 |
| 20   | Nagaland                    | 28                   | 26                                 | 54                                 |                                    87 |
| 21   | Qdisha                      | 1061391              | 746946                             | 1070037                            |                               1973745 |
| 22   | Puducherry_                 | 5984                 | 6144                               | 9864                               |                                 12758 |
| 23   | Punjab                      | 689442               | 490269                             | 819573                             |                               1226195 |
|      | Rajasthan                   | 1950955              | 2108538                            |                                    |                               3707558 |
| 25   | Tamil Nadu                  | 812728               | 822571                             | 1538712                            |                               2195229 |
| 26   | Telangana                   | 962217               | 1290336                            | 1852270                            |                               1885462 |
| 27   | Tripura                     | 885                  | 1116                               | 6771                               |                                 21651 |
| 28   | Uttarakhand                 | 160175               | 147836                             | 228679                             |                                276170 |
| 29   | Uttar Pradesh               | 6400555              | 6263478                            |                                    |                              18605374 |
| 30   | West Bengal                 | 1189109              | 523348                             | 1703494                            |                               2323325 |
|      | Grand Total                 | 25930190             | 23920622                           | 45487885                           |                              62389065 |

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