Govt approves Rs 3.7 lakh cr package for farmers to continue urea subsidy, promote natural farming

The cabinet committee on economic affairs (CCEA), chaired by Prime Minister Narendra Modi, approved Rs 3.7 lakh crore package for farmers, including for the continuation of the urea subsidy scheme, and for promoting natural farming. The package comes ahead of the assembly elections in Madhya Pradesh, Rajasthan, Chhattisgarh and Telangana where agriculture plays a major role in the economy.

Calling it a bouquet of schemes, the government said the package, which seeks to promote sustainable agriculture, is focused on the overall well-being and economic betterment of farmers. “The initiatives will boost farmers’ income, strengthen natural/organic farming, rejuvenate soil productivity, and ensure food security,” Union Minister Mansukh Mandaviya said during a cabinet briefing on Wednesday.

The major component of this bouquet of schemes is the continuation of the urea subsidy scheme to ensure constant availability of urea to farmers at the same price of Rs 242 for 45 kg bag excluding taxes and neem coating charges. Out of the total approved package, Rs. 3,68,676.7 crore have been committed for urea subsidy for three years (2022-23 to 2024-25). This is apart from the recently approved nutrient-based subsidy of Rs 38,000 crore for kharif season for 2023-24.

The farmers need not spend extra for the purchase of urea, and this will help moderate their input costs. At present, the MRP of urea is Rs. 242 per 45 kg bag (excluding charges towards neem coating and taxes), whereas the actual cost of the bag comes to around Rs. 2,200. The scheme is wholly financed by the government of India through budgetary support. The continuation of urea subsidy scheme will also maximize indigenous production of urea to reach self-sufficiency levels, the cabinet note said.

Due to the changing geopolitical situation and increased raw material prices, fertilizer prices have been increasing multifold globally over the years. However, to cushion the farmers, the government announced the subsidy. The fertilizer subsidy has been increased from Rs. 73,067 crore in 2014-15 to Rs. 2,54,799 crore in 2022-23.

The second component of the schemes approved is strengthening the nano urea eco-system. The government said by 2025-26, eight nano urea plants with a production capacity of 44 crore bottles equaling to 195 LMT of conventional urea will be commissioned. Nano fertilizer releases nutrients in a controlled manner contributing to higher nutrient use efficiency while costing less to the farmers. The application of nano urea has demonstrated an increase in crop yield.

The government is pushing for the revival of six urea production units at Chambal Ferti ltd., Kota in Rajasthan, Matix ltd., in Panagarh of West Bengal, Ramagundam in Telangana, Gorakhpur in UP, Sindri in Jharkhand and Barauni in Bihar, since 2018 to make the country atmanirbhar in urea production and availability. “Indigenous production of urea has increased from the level of 225 LMT during 2014-15, to 250 LMT during 2021-22. In 2022-23, production capacity has increased to 284 LMT. These along with nano urea plants will reduce our current import dependency in urea and finally make us self-sufficient by 2025- 26,” the cabinet note added.

Another component of the scheme is to boost the nutrient quality of the soil which is diminished due to excessive crop cycles. Titled PM Programme for Restoration, Awareness Generation, Nourishment and Amelioration of Mother – Earth (PMPRANAM), the scheme aims to adopt natural ways of farming and promotion of balanced use of chemical fertilizers. The scheme was announced in the budget early this year. The scheme aims to incentivize states to promote alternate fertilizers and the balanced use of chemical fertilizers.

This will be done by allotting Rs. 1451.84 crore for market development assistance (MDA) for promoting organic fertilizers from gobardhan plants (biogas). The MDA scheme is in the form of Rs 1500 per MT to support the marketing of organic fertilizers, fermented organic manures, and phosphate-rich organic manures produced as by-products from biogas plants.

“This on the one hand will facilitate in addressing the challenge of management of crop residue and problems of Parali burning, will also help in keeping the environment clean and safe and at the same time provide an additional source of income for farmers. Farmers will get organic fertilizers at affordable prices.”

To address the sulfur deficiency of soil and save input costs for the farmers, another initiative of the package is the introduction of Sulfur coated urea (urea gold) in the country for the first time. It is more economical and efficient than the currently used neem-coated urea. It will address Sulfur deficiency in the soil in the country. It will also save input costs for the farmers and also raise incomes for farmers with enhanced production and productivity.