Time has come for national debate on DBT in fertilisers, says Chouhan

Union Agriculture Minister Shivraj Singh Chouhan calls for a national debate on direct benefit transfer in fertilisers to curb diversion and ensure subsidies reach farmers

The time has come for a national debate on direct benefit transfer (DBT) in fertilisers, for which the government has formed a small group, Union Agriculture Minister Shivraj Singh Chouhan said on Tuesday while speaking at the Business Standard Manthan Event 2026.

 

He said this was to ensure that no diversion of cheap crop nutrients took place in the name of farmers, who could choose their fertiliser in accordance with their requirements and not be guided just by price.

 

“There should be manthan on this. I am also asking farmers for their opinion because using technology fertiliser subsidy can be transferred directly to the farmer’s account,” Chouhan said in a talk with A K Bhattacharya.

 

 

In FY26, urea consumption in India is expected to reach an all-time high of almost 40 million tonnes, driven by increased demand due to higher acreage under maize and rice and also its inexpensive rates as compared to other fertilisers.

 

As a result of high consumption, recent Budget documents show the subsidy allocation has risen by 11.05 per cent this financial year (FY26) to more than ₹1.86 trillion as against the Budget estimates of about ₹1.68 trillion.

 

In India, the cost of production of domestically produced urea is close to ₹32,000-35,000 per tonne while the imported price of urea is around ₹36,000 per tonne (assuming a landed price of $420 per tonne for urea).

 

However, it is available to farmers at a subsidised retail rate of ₹5,630 per tonne (excluding goods and services tax). This price has not been changed in more than 10 years.

 

“I am opening this for debate. People should suggest. Let’s make a common agreement and then decide which direction to go,” Chouhan said.

 

On whether the Centre would bring back the withdrawn farm laws, Chouhan said there was no chance of that because states were reforming their agriculture marketing and it is up to them as to how much they would open up their agricultural markets.

 

He showed concern about high dependence on agriculture and low productivity.

 

The minister said 48 per cent of India’s workforce was dependent on agriculture as against over 70 per cent earlier. With a population of over 1.4 billion, ensuring food and nutrition security remains a central task. “Farmers are providers of food and therefore providers of life. Serving farmers is like worship,” he said.

 

However, he acknowledged concerns over high dependence on agriculture and low productivity. While agriculture will remain the mainstay for years, he said alternative employment opportunities were expanding in industry, services and information technology, which will gradually reduce pressure on the farm sector.

 

Six principles for farmers’ welfare

 

The minister’s six-point road map guiding government policy was: Increasing production and productivity; reducing the cost of cultivation; ensuring remunerative prices; compensating farmers for losses where necessary; promoting diversification and value addition; and protecting soil health for future generations

 

On minimum support price (MSP), he said the government had ensured a minimum 50 per cent return over the cost of production. He cited large-scale procurement of wheat, rice and even perishable crops under various interventions, including tomatoes, onions, and potatoes.

 

Under the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA), states have been allowed to procure at MSP. The Centre bore the transport costs in some cases to stabilise prices.

 

Bhavantar model expanded

 

Referring to his tenure as chief minister of Madhya Pradesh, Singh recalled the “Bhavantar” price-deficiency payment model, where instead of physical procurement, farmers were compensated for the gap between MSP and market price.

 

“If the MSP is ₹5,000 and the market price is ₹4,000, the ₹1,000 difference can be transferred directly to the farmer’s account. This reduces storage and handling costs,” he explained.

 

He said the Centre had now enabled states to adopt a similar approach for oilseeds.

 

However, the choice between physical procurement and price compensation will depend on national requirements, farmer preference, and state capacity.

 

Farmer IDs and direct transfer

 

The minister said over 85 million farmers had been issued digital farmer IDs, capturing landholding and crop details.

 

This database enables direct benefit transfer and prevents over-claiming.

 

The Union Budget, he added, has prioritised digital agriculture. A new integrated digital platform will allow farmers to upload photos of crop diseases, receive advisory services, check weather updates, and access market prices across cities. The system will integrate with e-NAM (e-National Agricultural Marketing) for online sales.

 

Mechanisation is also being promoted, including a newly launched cotton-picking machine that reduces harvesting costs from ₹10-15 per kg to about ₹5 per kg.

 

Budget and subsidy debate

 

Responding to criticism that agricultural allocation rose only 6 per cent, with nearly half the amount going to the Pradhan Mantri Kisan Samman Nidhi, the minister said the fertiliser subsidy of ₹1.7 trillion and allocations for crop insurance, mechanisation, and allied sectors are given separately.

 

He talked of a major productivity push in coconut, cashew, cocoa and coffee, including replanting ageing trees with high-yield varieties.

 

Rural employment overhaul

 

On changes to the rural employment programme, renamed Vikshit Bharat Grameen Rojgar Yojana (VB-G RAM G), the minister said the scheme was demand-driven.

 

The Budget allocation has risen from ₹86,000 crore last year to ₹1.51 trillion, with ₹95,600 crore provided upfront. Employment days have been increased from 100 to 125 annually.

 

He said an unemployment allowance would be paid automatically if wages were delayed beyond 15 days. Local gram sabhas will decide project priorities to ensure assets benefit villages.

 

State-specific farm road maps

 

The Centre is working with states to prepare customised agricultural road maps, recognising varied agro-climatic conditions. Over 16,000 scientists from research institutions and universities have been directed to spend time in villages to undertake demand-driven research.

 

Farmers have flagged issues such as red rot in sugarcane, pink bollworm in cotton, and short shelf-life of tomatoes. Research teams have been assigned to address over 500 field-level concerns.

 

Trade deals safeguard core crops

 

On the free-trade agreements with several nations, the minister said no concessions had been granted on core crops like wheat, rice, fruit or vegetables. Instead, export opportunities for spices, tea, coffee and textiles are expected to expand.

 

On farmers’ welfare he said it did not matter whether he was chief minister or Union minister.

 

The minister underlined the point that while the Centre framed policies and schemes, implementation rested largely with the states.

 

“In states, monitoring has to happen at micro level — whether benefits have reached the farmer or not. At the Centre, we make policy, coordinate and guide. Ultimately, the states take programmes to the grassroots,” he said.

 

Skill and financial literacy

 

Responding to questions from the audience, the minister acknowledged the need for financial management training for farmers. Krishi vigyan kendras and agricultural institutions will strengthen capacity-building and food-processing skills.

 

The government’s focus is on technology-driven, state-coordinated and farmer-centric reforms, he said.

 

“Policies must reach the field. Research must reach the farm. And benefits must reach the farmer directly.”