Fertiliser policy reform: Balancing subsidies and soil health

Paper: GS – III, Subject: Economy, Topic: Agriculture inputs, Issue: Need to Fertiliser policy reform.

Context:

Amid global conflicts like the Russia–Ukraine War and tensions in West Asia, concerns have risen over fertiliser supply, prices, and food security. Experts argue that India must reform its fertiliser policy to ensure long-term sustainability and efficiency.

Key Takeaways:

Background:

• India is one of the largest consumers of fertilisers, using nearly 40 million tonnes of urea annually, with a significant portion being imported.
• The fertiliser subsidy regime heavily favours urea, while phosphatic and potassic fertilisers are relatively costlier, resulting in price distortions.
• The ideal nutrient application ratio (N:P:K = 4:2:1) has been skewed due to excessive nitrogen use.
• Rising global prices of fertilisers such as DAP have sharply increased subsidy expenditure.

Explanation:

• The existing policy structure incentivises overuse of subsidised urea, leading to nutrient imbalance, soil degradation, and declining agricultural productivity over time.
• Nutrient Use Efficiency remains low (around 30–40%), indicating inefficient absorption by crops and wastage of inputs.
• Excessive nitrogen application contributes to environmental degradation, including groundwater contamination through nitrates and emissions of nitrous oxide, a potent greenhouse gas.
• The subsidy regime imposes a high fiscal burden on the government while also leading to diversion and leakages.
• Import dependence for fertilisers exposes India to external shocks, including supply disruptions and price volatility.
• Reform measures should include shifting towards Direct Benefit Transfer (DBT) to farmers to ensure targeted subsidy delivery and reduce inefficiencies.
• Rationalisation of fertiliser pricing based on nutrient content is necessary to promote balanced fertilisation practices.
• Encouraging alternatives such as biofertilisers and organic inputs, along with technologies like neem-coated urea and fertigation, can improve efficiency and sustainability.
• Enhancing domestic production capacity and diversifying import sources is critical to reducing vulnerability.

Conclusion:

India must transition from a subsidy-driven fertiliser regime to an efficiency- and sustainability-oriented framework to ensure long-term agricultural productivity, environmental protection, and fiscal stability.

Source: (The Indian Express)

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