The Union Cabinet on Wednesday decided not to increase fertiliser rates and approved a crop-nutrient subsidy of ₹1.08 lakh crore for the June-September kharif or summer-sown season, union health, fertilisers and chemicals minister Mansukh Mandaviya said at a media briefing in the national Capital.
The country has sufficient stocks and arrangements for all key fertilisers, including urea, the minister added.
India’s food security is closely linked to the availability of fertilisers, which are federally subsidised for millions of farmers.
The summer-sown season accounts for nearly half of the country’s annual food supply.
“International rates of fertilisers have come down slightly. So that farmers keep getting timely access to fertlisers and don’t face any financial burden, the Narendra Modi government has always been prompt. There will be no increase in fertiliser prices for the kharif season for farmers,” the minister said after the cabinet meet.
India relies on imports to meet its total fertiliser demand. Global prices of various farm chemicals had rocketed to multi-year highs in 2022-23 due to the Ukraine conflict, resulting in a total fertiliser subsidy bill of a record ₹2.56 lakh crore, the minister said.
An emerging El Nino, a monsoon-disrupting global weather pattern, is a key risk to summer crops this year.
Although the India Meteorological Department (IMD) forecast a normal monsoon in April, it did not discount the possibility of an El Nino impacting the monsoon rains, which are critical because nearly 60% of the country’s farmlands don’t have access to irrigation.
“If rains are scanty, the demand for fertilisers could go up to keep crops healthy,” said Rahul Chouhan of IGrain Pvt Ltd.
Fertiliser companies sell their products at a discount to cultivators through internet-enabled rural outlets. The government then pays the difference between market rates and the discount to the firms.
For 2023-24, the union budget in February allocated ₹1.75 lakh crore, but even though fertiliser rates have stabilised, actual full-year spending could cross ₹2 lakh crore again, Mandaviya said.
“There has been no shortage of fertilisers in the past nine years,” Mandaviya said, adding, “There might have been one or two instances of temporary delay due to delay in (railway) racks reaching their destinations.”
India’s better stocks position this year comes on the back of higher domestic output of nano urea, a highly efficient novel form of the nutrient.
The total cultivated area in the country is estimated at 140 million hectare.
“Given the final fertiliser subsidy spending what it was in 2022-23, it works out to ₹8,909 per hectare subsidy spending on fertilisers,” the minister said.
Economists generally use the net-cultivated area, which varies from year to year, to make most crop calculations.
The minister also said the government spent roughly ₹21,000 per cultivator as fertiliser subsidy in 2022-23.
India has an estimated 120 million farmers.
To hedge against price and supply swings amid a lumbering Russia-Ukraine conflict and other ongoing geopolitical risks, the Modi government has signed several long-term import deals at pre-negotiated rates with several nations.
The fertiliser ministry in coordination with the external affairs ministry has overseen a slew of these deals. Indian firms have for the first time finalised investments in several North African mineral-rich nations, part of measures aimed at securing long-term supplies.
