Centre mulls direct transfer of fertiliser subsidy to farmers

Union government is exploring the possibilities of transferring subsidies on fertilisers directly to farmer’s bank account instead of producers of fertilisers. The Department of Fertilizers is exploring possibilities of transferring the fertiliser subsidy directly to the farmers, said Hansraj Gangaram Ahir, Minister of State for Chemicals & Fertilizers, in response to a question in the Lok Sabha on December 15, 2015.
 
Urea is provided to farmers at a statutory price of Rs 5360 per MT plus a maximum of 5 percent of the statutory price for neem coating urea. The MRP of urea is much below the actual delivered cost.  The difference of delivered price and MRP is paid as subsidy to the urea manufacturer/importer by the Government of India.
   
The MRP along with the subsidy provided on these fertilisers is printed on each bag of these fertilisers and the farmer, who purchases these fertilisers, gets the benefit of subsidy as the subsidy on fertilisers is provided to farmers irrespective of their landholding and economic status.
 
The current unpaid subsidy bills for imported urea sector is about Rs 1,668 crore. Unpaid subsidy bill of indigenous urea sector is about Rs 10,747 crore.
 
While the government contemplating direct fertiliser subsidy transfer to farmer’s bank account, experts believe that identification of beneficiary farmers is a major challenge in implementation of this scheme.