Central idea
The article discusses the recent approval of Nutrient-Based Subsidy (NBS) rates for Rabi and Kharif seasons in 2022-23 by the union cabinet. It explains the NBS regime, its objectives, and challenges, emphasizing the need for a balanced approach to address economic, environmental, and distribution issues.
Understanding Nutrient-Based Subsidy (NBS) Regime:
- Subsidized Fertilizers: Farmers get fertilizers at lower rates based on nutrients like Nitrogen, Phosphorus, Potash, and Sulphur.
- Additional Subsidy: Fertilizers with extra nutrients like molybdenum and zinc receive added subsidies
Key Features of Nutrient-Based Subsidy (NBS):
- Targeted Subsidy: Fertilizers are subsidized based on the nutrients they contain, such as Nitrogen (N), Phosphorus (P), Potash (K), and Sulphur (S).
- Additional Subsidy for Fortified Fertilizers: Fertilizers containing secondary and micronutrients, like molybdenum (Mo) and zinc, receive extra subsidies.
- Annual Determination of Rates: The government announces subsidy rates for Phosphatic and Potassic (P&K) fertilizers annually, considering factors like international and domestic prices, exchange rates, and inventory levels.
- Promotion of Balanced Fertilization: NBS aims to achieve an optimal balance (N:P:K = 4:2:1) in fertilization, improving soil health and crop yields.
- Implementation Authority: Administered by the Department of Fertilizers, Ministry of Chemicals & Fertilizers since April 2010.
Rationale for Nutrient-Based Subsidy (NBS):
- Efficient Resource Allocation: NBS ensures subsidies are directed to farmers based on nutrient requirements, promoting judicious use of fertilizers.
- Optimal NPK Fertilization: By encouraging a balanced nutrient ratio (N:P:K = 4:2:1), NBS aims to enhance soil health, leading to increased crop yields and farmer income.
- Sustainable Agricultural Practices: The policy supports environmentally sustainable practices by preventing imbalanced fertilizer usage, reducing soil degradation, and minimizing nutrient runoff.
- Food Security: Subsidized P&K fertilizers availability during Kharif season supports agricultural productivity, contributing to food security in India.
- Long-Term Soil Health: NBS promotes a long-term approach to soil management, addressing nutrient deficiencies and ensuring the fertility of agricultural land.
Nutrient-Based Subsidy (NBS) Rates Approval:
- Rabi Season 2022-23: Subsidy rates given for essential nutrients like Nitrogen, Phosphorus, Potash, and Sulphur.
- Kharif Season 2023: Approval for Phosphatic and Potassic (P&K) Fertilizers.
Objective of NBS Policy:
- Balanced Fertilization: Aims for an optimal balance (N:P:K=4:2:1) to enhance soil health and crop yield.
- Increased Income: Boosts farmers’ income through improved productivity.
- Reducing Subsidy Burden: Expects rational fertilizer use to ease the subsidy burden on the government.
Significance of NBS Subsidy:
- Agricultural Support: Ensures affordable availability of DAP and other P&K fertilizers during Kharif for better agricultural productivity.
- Resource Allocation: Crucial for efficient allocation, directing subsidies where needed for sustainable agriculture.
Challenges with NBS Policy:
- Economic and Environmental Costs: High subsidy burden strains the economy, leading to imbalanced fertilizer use and environmental issues.
- Black Marketing and Diversion: Subsidized urea faces illegal sale and smuggling to non-agricultural users.
- Leakage and Misuse: Inefficient distribution can lead to fertilizer misuse or non-delivery to intended farmers.
- Regional Disparities: Uniform policy may not cater to diverse regional needs, impacting nutrient application and productivity.
Way Forward for NBS Policy:
- Uniform Policy: A necessary step for essential nutrients (N, P, K) with considerations for regional variations.
- Cash Subsidy Alternative: Long-term shift to a per-acre cash subsidy for flexible fertilizer purchase.
- Balancing Act: Striking a balance between price control, affordability, and sustainable nutrient management for NBS success.
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