Parliamentary Panel Warns Against Under-Funding of Fertilizer Subsidies

The parliamentary Standing Committee on Chemicals and Fertilizers has raised concerns over reduced funding for fertilizer subsidies, warning that it could negatively impact farmers. 

Key Findings of the Parliamentary Standing Committee on Chemicals and Fertilizers

• Geopolitical Risks Disrupting Fertilizer Security: Global supply chain disruptions and price fluctuations have caused shortages of key fertilizers like Diammonium Phosphate (DAP).  
  • Heavy reliance on imports makes India vulnerable to external shocks.  
• Lack of Domestic Mining for Critical Raw Materials: Despite agreements with fertilizer-producing nations, there has been no progress on securing mining leases for phosphates and potash.  
  • Domestic exploration and refining could reduce import dependency.  
• Mismatch in Soil-Specific Fertilizer Grades: Current NPKS (Nitrogen- Phosphorus-cPotassium- Sulphur) grades do not always match regional soil needs.  
  • Farmers often incur extra costs to customize blends, increasing financial burden.  
• Weak Oversight in Direct Benefit Transfer (DBT) System: No robust mechanism to verify genuine beneficiaries, leading to potential subsidy misuse.  
  • Strengthening authentication processes could improve efficiency.  
• Nano Fertilizers Show Promise but Need More Research: Nano Urea & Nano DAP have demonstrated yield improvements in crops like peas (up to 14.8%) and sugarcane (up to 4%).  
  • However, large-scale adoption requires further field trials and farmer awareness.

Concerns Over Underutilization of Funds

• The report noted poor fund utilization in 2024-25:  
  • Indigenous phosphorus and potassium (PK) fertilizers were 20% unused.  
  • Imported PK fertilizers 12% unused.  
  • Indigenous urea 14.76% unused.  
  • Market Development Assistance (MDA) 59.57% unused.  

Key Recommendations of the Parliamentary Committee

• Additional Funds for Subsidy Schemes:  The Fertilizers Ministry projected ₹1,84,704.63 crore for 2025-26, but the Finance Ministry reduced it by 7.38% to ₹1,71,082.44 crore.  
  • Cuts affect both the Nutrient-Based Subsidy (NBS) Scheme and the Urea Subsidy Scheme.  
  • The panel urged the ministry to request more funds at the revised estimate stage to avoid disruptions.  
• Expand Domestic Production of Nano Fertilizers: The committee recommended faster establishment of nano urea production units to meet demand.  
• Secure Mining Leases for Self-Sufficiency: The panel suggested long-term mining agreements to reduce import dependency.  
• Fertilizer Crisis Early Warning System: To address supply disruptions, create a Fertilizer Crisis Early Warning System (FCEWS) for shortage prediction and strategic reserve management. 

Conclusion

The panel emphasized the importance of urea in food production and urged the continuation of subsidy schemes. It also called for greater promotion of nano fertilizers among farmers to enhance agricultural productivity.