1-Apr-2022: DBT on Fertilizer Subsidy

Department of Fertilizers has successfully implemented Direct Benefit Transfer system across all States/U.Ts by 1st March 2018. Under the fertilizer DBT system, 100% subsidy on various fertilizer grades is released to the fertilizer companies on the basis of actual sales made to farmers/buyers through Point of Sale (PoS) devices installed at each retail shop.

Two extensive & independent evaluation studies were conducted by NITI Aayog appointed agency ‘M/s. Micro Save’. The highlights of the assessment made by Microsave are as under: 

1. Implementation of DBT System has streamlined the Fertilizer distribution. Retailers and farmers in all districts reported “Nil shortage" of urea owing to neem coating.
2. There is improved tracking through mFMS Id i.e. Fertilizer companies have on-boarded untraceable retailers and co-operative depots on mFMS system to avoid delay in subsidy payments.
3. Overcharging by retailers has reduced as each fertilizer purchase by farmers is supported by a receipt generated through PoS machines indicating both MRP paid by the farmers and the subsidy component paid by the Government on the quantity of fertilizer purchased by the farmers.
4. Cross border sale has also reduced e.g. across border to Nepal and Bangladesh from Kishanganj.
5. The reports meant for relevant Stakeholders are available at https://www.fert.nic.in and www.urvarak.nic.in under Publications/ Reports tab.

The number of buyers under DBT during the last two years is as follows:-

22-Mar-2022: Subsidy on fertilizers

Urea is provided to the farmers at a statutorily notified Maximum Retail Price (MRP). The MRP of 45 kg bag of urea is Rs.242 per bag (exclusive of charges towards neem coating and taxes as applicable). The difference between the delivered cost of urea at farm gate and net market realization by the urea units is given as subsidy to the urea manufacturer/importer by the Government of India. Accordingly, all farmers (including poor and marginal farmers) are being supplied urea at the subsidized rates.

Further, the Government has implemented Nutrient Based Subsidy Policy w.e.f. 1.4.2010 for Phosphatic and Potassic (P&K) Fertilizers. 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. Accordingly, any farmer, including poor and marginal farmers, who is buying these fertilizers is getting benefit of subsidy.          

As per the final report prepared by Agricultural Development and Rural Transformation Centre (ADRTC), Bengaluru, Neem Coated Urea has led to:

1. Improvement in soil quality.
2. Decrease in cost of pest & disease control and weed management.
3. Improvement in the yield of all crops and their by-products.
4. Highest incremental income in case of tur, followed by sugarcane, soybean, paddy, jute and maize crops.
5. Diversion of normal urea to other than crop production purposes has completely stopped post introduction of Neem Coated Urea(NCU).