In a major pro-farmer decision, the Government recently took a historic decision of hiking fertilizer subsidy.
- The decision to hike the subsidy for Di-ammonium Phosphate (DAP) fertilizer from Rs. 500 per bag to Rs. 1200 per bag, which is an increase of 140% was taken at a high-level meeting chaired by Prime Minister Narendra Modi.
- It was discussed that the price of fertilizers is undergoing an increase due to the rising prices of phosphoric acid, ammonia, etc. internationally.
- Therefore, despite the rise in international market prices of DAP, it has been decided to continue selling it at the older price of Rs 1,200 per bag in a bid to ensure the soil nutrient is available to farmers at old rates despite a sharp rise in global prices.
- Recently, the international prices of phosphoric acid, ammonia etc. used in DAP have gone up by 60% to 70%. So the actual price of a DAP bag is now Rs 2400, which could be sold by Fertilizer companies at Rs 1900 after considering a subsidy of Rs 500.
- With the recent decisions, farmers will continue to get a DAP bag for Rs 1200.
- Note: After urea, Di-ammonium Phosphate (DAP) is the most widely used fertilizer in the country.
- The central government has decided to bear all the burden of price hikes.