New Delhi, June 12: The government today approved a new fertiliser policy aimed at bringing down prices and encouraging farmers to use more nutrient-based fertilisers.
Prices of complex fertiliser varieties are expected to come down by an average of Rs 1,416 a tonne, or Rs 70 a bag, finance minister P. Chidambaram said after a meeting of the cabinet committee on economic affairs (CCEA). Prices of other fertilisers such as urea will not change.
Complex fertilisers have at least two nutrients, while regular fertilisers have only one nutrient such as nitrogen, phosphorous or potash.
The CCEA also approved a uniform freight subsidy scheme so that fertiliser bags would be sold at the same price all over the country. The freight subsidy will be brought in two phases and effective retrospectively from April 1.
Officials said in the long run the move would see the government’s burgeoning fertiliser bill coming down. The bill for the current financial year is expected to be over Rs 90,000 crore compared with Rs 40,340 crore allotted in the budget. The subsidy bill has been going up on account of a global surge in fertiliser prices on the back of a rise in natural gas prices.
The nutrient-based fertiliser policy which encourages complex, or mixed, fertiliser usage is an outcome of a report prepared a group of experts set up by Prime Minister Manmohan Singh a year back.
The report said that large tracts of farmland in India was becoming barren because of the excessive use of one fertiliser — urea. The report criticised the current policy of subsidising urea and making it cheaper than most other fertilisers.
As a remedy, manufacturers will have the freedom to assess the nutritional requirements of soil, mix the nutrients accordingly and sell as separate products.
A subsidy on the retail price will be given if farmers pick up the nutrient mix that their district’s soil needs. The subsidy could be paid on sale either directly to the farmer or to the marketers.
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