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

Why are nitrogenous fertilizers still a first choice of farmers?


From UPSC perspective, the following things are important :

Prelims level: Basics of Fertilizers, applications, effects etc.

Mains level: Reasons and effects of Indiscriminate use of Urea and DAP fertilizers



  • Two ambitious schemes of the Central government such as Soil Health Card and mandatory neem-coating of urea were supposed to promote balanced use of fertilisers. However, far from weaning farmers from urea, annual consumption of this nitrogenous fertiliser has only risen from 30 to 35 million tonnes (mt) in the last five years.

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Rise in the sales of nitrogenous fertilizers

  • Rise in sales of not only urea but also DAP: This year, not only have urea sales gone up by 3.7 per cent during April-October over the same period of 2021, it has grown even more, at 16.9 per cent, for di-ammonium phosphate (DAP).
  • Sales are not in correct proportion: It has come even as sales of all other fertilisers including complexes containing nitrogen (N), phosphorus (P), K (potash) and sulphur (S) in different proportions have fallen.
  • Urea and DAP are the dominant choice of Indian farmers: In other words, instead of balanced use of plant nutrients based on soil testing and specific crop requirement, Indian farmers are effectively applying just urea and DAP both high-analysis fertilisers containing 46 per cent N and P respectively.


What are the reasons for increasing use of Urea and DAP Fertilizers?

  • The non-urea fertiliser is decontrolled or fixed by the companies: The government has fixed the maximum retail price (MRP) of urea at Rs 5,628 per tonne. The MRPs of other fertilisers are technically decontrolled, but companies have been “told” not to charge more than Rs 27,000/tonne for DAP.
  • Informally fixed prices are higher: The informally-fixed MRPs are higher at Rs 29,000-31,000 and Rs 34,000 per tonne for NPKS complexes and muriate of potash (MOP) respectively, but farmers have little incentive to buy at these prices.
  • DAP is cheaper to apply: Farmers are reluctant to apply complexes such as 10:26:26:0, 12:32:16:0 and 20:20:0:13 when DAP is cheaper and has 46 per cent P as well as 18 per cent N.
  • Price is the primary concern for over micronutrients: The fact that DAP does not contain K, S or other macro and micro nutrients wouldn’t matter to a majority of farmers. For them, choice of fertilisers is primarily a function of prices.
  • Subsidies on individual ferlizers are to be blamed: Underpricing of urea (a historical phenomenon) and DAP (recent) is a product of subsidy-induced market distortions, for which the blame lies squarely with the Government.

Ideal ratio for N:P:K and effects of excessive use

  • Ideal ratio v/s current NPK ratio: The effects of these the current NPK ratio is about 13:5:1, as against the ideal 4:2:1 would ultimately show up in crop yields.
  • Plants will respond poorly: Plants, like humans, will respond poorly to fertilisers if only one or two nutrients are given in excess.
  • Disturbs soil health: Excessive use of chemical fertilizers kills all the microorganisms available in the soil, which are so essential for maintaining soil health

What the government can do?

  • Changing the subsidy policies: The Government should replace subsidies on individual fertiliser products with a flat per-hectare cash transfer, maybe twice a year.
  • E- wallet account for money transfer only to purchase fertilizers: Every farmer can have an e-wallet account into which this money can be credited before the kharif and rabi planting seasons. The e-wallet may be used only for the purchase of fertilisers.
  • Maintaining stock of basic fertilizers: The government can maintain a stock of basic fertilisers, including urea and DAP, to ensure no untoward price rise even in a decontrol scenario.


Have you heard? “PM PRANAM” scheme

  • In order to reduce the use of chemical fertilisers by incentivising states, the Union government plans a new scheme – PM PRANAM, which stands for PM Promotion of Alternate Nutrients for Agriculture Management Yojana.
  • The proposed scheme intends to reduce the subsidy burden on chemical fertilisers.
  • This burden if uneased, is expected to increase to Rs 2.25 lakh crore in 2022-2023, which is 39% higher than the previous year’s figure of Rs 1.62 lakh crore.
  • The scheme will not have a separate budget and will be financed by the “savings of existing fertiliser subsidy” under schemes run by the Department of fertilisers.


  • The compulsions of electoral politics have clearly trumped concerns over soil nutrient imbalances. Price distortions in fertilisers will not help farming in the long run. Govt can offer acreage-based cash transfers.

Mains Question

Q. Despite government efforts to reduce nitrogenous fertilizers, the annual consumption of these fertilizers is increasing. Discuss the reasons and what government can do more?

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