PMO announces old fertilizer rates for farmers with 140% hiked subsidy on DAP fertiliser

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In what the Prime Minister’s office calls a historic pro-farmer decision, the Centre on May 19, 2021 decided to increase the subsidy for Di-Ammonium Phosphate (DAP) fertiliser from Rs. 500 per bag to Rs. 1200 per bag, an increase of 140 percent. The hike in fertilizer prices had sparked outrage among farmers. Earlier, the All India Kisan Sabha (AIKS) mentioned how the DAP is a primary fertilizer during sowing of different Kharif crops like paddy, cotton, groundnut, etc. The government now appears to have bowed down to pressure from farmers’ groups.

During a high-level meeting, Union Ministers discussed the rising fertilizer prices affected by the internationally rising prices of phosphoric acid, ammonia, etc.

“Despite the rise in international market prices of DAP, it has been decided to continue selling it at the older price of Rs.1200 and the central government has decided to bear all the burden of price hike. The amount of subsidy per bag has never been increased so much at once,” said the PMO.

Annually, the central government spends about Rs 80,000 crore on subsidies for chemical fertilisers. The recent decision will result in an additional cost of Rs. 14,775 crore. However, the DAP fertilizer is also one of the most crucial manure for farmers.

Last year, the actual price of the fertiliser was Rs 1,700 per bag with a government subsidy of Rs. 500 per bag. However, international prices of phosphoric acid, ammonia etc. used in DAP increased by 60 percent to 70 percent. Thus, the actual price of a DAP bag is Rs. 2,400 that can now be reduced to Rs. 1,200 per bag.

“This is the second major decision in the farmers’ interest, after directly transferring Rs. 20,667 crore in Farmers’ account under PM-KISAN on the day of Akshay Tritiya,” said the PMO.