Farm subsidies


Nutrient based subsidy regime- the mechanism by which the centre disburses the subsidy to manufacturers 
  • India offers subsidised to compensate who sell fertilizers below market rates

Fertilizers subsidy increased for 2021 Kharif

Formers benefited and Government getting loss

Now, the farmers will get a bag of DAP for Rs 1200 instead of Rs 2400.

subsidy rates for DAP and other P & K fertilisers for upcoming Kharif season issued up to October 2021

Government to provide a total of Rs.14,775 crore more subsidy in Kharif season

Rs. 9,125 Crore additional subsidy for DAP and Rs. 5,650 Crore additional subsidy for NPK based complex fertiliser


The Central Government will provide a total of Rs.14,775 crore more subsidy in the Kharif season 21. 

  1. In which Rs.9,125 Crore additional subsidy for DAP 
  2. And Rs.5,650 Crore additional subsidy for NPK based complex fertiliser, will be spent.

Now the subsidy on P&K fertilizers including DAP have been increased more than 100% till Kharif season 21. 

  • With the additional amount of Rs 14,775 crore in Kharif season 21 towards this subsidy, the existing subsidy load which was on Government Rs.27,500 Crores in 2020-21 will now be Rs. 42,275 Crores.
  • Subsidy of DAP fertilizer has been increased from Rs.500 per bag to Rs.1200 per bag, which is an increase of around 140% for this kharif. 

Thus, despite the rise in international market prices of DAP, it has been decided to continue selling it at the older price of Rs.1200 per bag

To avail P&K fertilizers to the farmers at affordable prices. The subsidy is released to fertilizer companies as per NBS rates so that they can make available fertilizers to farmers at affordable price.

In last few months, the international prices of raw materials of DAP and other P&K fertilizers increased sharply. Prices of finished DAP etc. in the international market have also increased proportionately. So the actual price of a DAP bag increased to Rs.2400, which was being sold by Fertilizer companies at Rs.1900 after considering the subsidy of Rs.500 per bag.

The Government of India is taking all efforts to ensure that farmers do not have to face the brunt of price-rise. The Government of India has decided to support farmers on this issue.

The Central Government spends about Rs.80,000 Crore on subsidies for chemical fertilisers every year. With the increase in subsidy in DAP and other subsidized P&K fertilizers, it has been decided to provide an additional Rs.14,775 crore as subsidy in Kharif season 21.

Note 

  • India imports upto a third of its domestic fertilizers reimbursement to meet the demand 
  • China is the largest producer of DAP, and is a key supplier of the nutrient to India. 
  • DAP: Diammonium phosphate 
  • MPO : Murata of Potash
Issue :  fertilizers crisis 2021 winter.
  • higher global rates jump ( sharp increase in international prices)
  • Low indigenous production of raw material 
  • Rise in prices of Phosphates and Potassic ( P& K) fertilizers. 

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