CACP warns fertiliser DBT may hurt agricultural output, reduce usage

The Commission suggested that digital platforms such as AgriStack should be leveraged to contain imbalanced use of soil nutrients and reduce the subsidy burden without affecting farm production

Any attempt to remove fertiliser subsidies or shift to direct benefit transfer (DBT) could lead to reduced fertiliser use, resulting in lower agricultural production, the Commission for Agricultural Costs and Prices (CACP) has said.

 

In its latest price policy report for the 2026-27 kharif season released on Wednesday, the Commission suggested that instead, digital platforms such as AgriStack should be leveraged to contain imbalanced use of soil nutrients and reduce the subsidy burden without affecting agricultural production.

 

India’s fertiliser subsidy is projected to rise to more than ₹2.17 trillion in FY26 against the Budget Estimate of around ₹1.67 trillion due to excessive consumption of urea, di-ammonium phosphate (DAP), and other fertilisers.

   

In FY27 too, the government expects fertiliser subsidy to remain at least 20 per cent higher than the Budget Estimate of ₹1.86 trillion because of a spike in global prices of finished fertilisers such as urea and DAP, as well as raw materials used in their production due to the West Asia crisis.

 

The CACP also said the commonly accepted ideal ratio of nitrogen (N), phosphorus (P), and potassium (K) at the all-India level of 4:2:1 should be revisited in view of changing cropping patterns, agro-climatic factors, soil characteristics, and irrigation coverage.

 

Instead, such norms should be developed at a more disaggregated level.

 

“In addition, special efforts should be made to promote use of micro and secondary nutrients and strategies to improve soil organic carbon,” the Commission said.

 

Meanwhile, the Commission also suggested a review of the open-ended procurement policy for paddy, saying persistently excess rice stocks due to open-ended procurement, high bonus on paddy by some states — particularly surplus states — and stagnating exports during the past three to four years have put huge pressure on storage and warehousing capacity and created significant financial stress on the public exchequer.

 

“Therefore, a limit needs to be imposed on procurement, especially in surplus states that offer bonus over and above the MSP and have high market fee and other charges,” the CACP said.