What is Di-Ammonium Phosphate (DAP)?

• DAP is a two-nutrient fertilizer that contains 18% nitrogen (N) and 46% phosphorus (P) as P2O5.
• DAP is highly soluble in water and soil, releasing phosphate and ammonium that plants can use.
• DAP is a popular choice for farming and other industries because of its high nutrient content and physical properties. It’s particularly effective in the early stages of plant development.

• Ensures affordable fertilizers for farmers to boost agricultural productivity.
• Applies to both Urea and Phosphatic & Potassic (P&K) fertilizers, each with distinct pricing/subsidy mechanisms.

Types of Subsidies:

1. Urea Subsidy

• Fixed MRP: Urea is sold at a statutorily notified MRP (₹5,360/ton in 2023), irrespective of production costs.
• Government Compensation: Bridges the cost gap, making urea highly affordable but often leading to overuse.

2. Nutrient Based Subsidy (NBS) for P&K (2010)

• Nutrient-Based Approach: Subsidies depend on Phosphorus (P) and Potassium (K) content, promoting balanced fertilization.
• Pricing Revision: Subsidy rates are reviewed annually or bi-annually based on global market prices.
• Objectives: Improve soil health, nutrient efficiency, and ensure affordability of P&K fertilizers.

3. Subsidies as per New Investment Policy (NIP) for Urea (2012)

• Self-Sufficiency Focus: Encourages new urea plants and revival of old ones to reduce imports.
• Investment Incentives: Aim to increase domestic production through favourable policies and pricing.

• Overuse of Urea: Low urea prices lead to excessive application, causing soil nutrient imbalance and environmental harm.
• Fiscal Burden: Total subsidy expenditures reached ₹2.25 lakh crore (2023–24), placing a heavy load on public finances.
• Imbalanced Nutrient Use: Heavy reliance on urea discourages the use of P&K fertilizers, degrading soil quality over time.
• Import Dependency: India relies significantly on P&K imports, exposing farmers to global price volatility.

PYQ:

[2020] With reference to chemical fertilizers in India, consider the following statements:

1. At present, the retail price of chemical fertilizers is market-driven and not administered by the Government.

2. Ammonia, which is an input of urea, is produced from natural gas.

3. Sulphur, which is a raw material for phosphoric acid fertilizer, is a by-product of oil refineries.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 and 3 only

(c) 2 only

(d) 1, 2 and 3