Fertilizer Sector reforms – NBS, bio-fertilizers, Neem coating, etc.

DBT scheme for fertilizer subsidies gets cabinet nod


Mains Paper 3: Agriculture | Issues related to direct & indirect farm subsidies & minimum support prices

From UPSC perspective, the following things are important:

Prelims level: Direct benefit transfer (DBT), Urea subsidy scheme

Mains level: Benefits of DBT scheme in various sectors

DBT for fertilizer subsidy payments

  1. The government has decided to implement direct benefit transfer (DBT) for fertilizer subsidy payments across India
  2. By this, the government seeks to prevent diversion of fertilizers for commercial use and generate data on the usage of the nutrients to help farmers

Rollout already began in most states

  1. The department of fertilizers has already rolled out the programme in most states
  2. Data obtained from it shows that transaction time and alleged instances of overcharging by retailers have come down
  3. Also, offtake has moderated, suggesting that overuse of subsidized fertilizers and their diversion for industrial use have declined

DBT model for fertilizer

  1. The DBT model for fertilizers, however, is slightly different from that for others such as cooking gas, in which the ultimate consumer gets the entitlement in their bank account
  2. DBT would entail 100% payment to fertilizer companies on sale of fertilizers to farmers at subsidized rates
  3. This is done because farmers cannot be forced to pay large amounts upfront for fertilizers and wait for reimbursement

Urea subsidy scheme

  1. The cabinet has also approved the continuation of the urea subsidy scheme for three years till 2020
  2. There will be no urea price hike till 2020
  3. The subsidy for locally produced and imported urea is part of the annual fertilizer subsidy outgo
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