Centre working on an alternative to direct transfer of fertiliser subsidy to farmers

This is for better identification of beneficiaries and providing them with the right mix of nutrients


Moving away from its initial plan for direct cash benefit transfer (DBT) of fertiliser subsidy to farmers, the government is now considering a two pronged approach — while the subsidy payment will continue at the producer level, farmers will be identified using a mix of their Aadhaar number, soil health card and land records.

This is aimed at better identification of beneficiaries and providing them with the right mix and quantity of nutrients. The sales of fertiliser will be made through point of sale machines to prevent leakages and ensure that actual sales are made, in a way akin to DBT in kind, like in the case of food subsidy. “The fertiliser subsidy will not be in the lines of direct benefit transfer in cooking gas at the retail level. Instead, the idea is to identify the farmer and his land and allocate the right amount and kind of fertiliser depending on his land record and soil fertility,” said an official familiar with the development.

Pilot study

A pilot study has already been conducted successfully in Krishna district in Andhra Pradesh and similar studies are now being carried out in 16 districts across the country before it is rolled out on a larger scale.

The Department of Fertilisers is said to be working on the project for which districts including Kishanganj (Bihar), Malda (West Bengal), Hosangabad (Madhya Pradesh), Karnal and Kurukshetra (Haryana), Krishna and West Godavari (Andhra Pradesh) and Nasik (Maharashtra) have been identified.

“In the case of fertiliser subsidy, it is not always possible to pay at the retail level as identification of marginal or landless farmers is difficult. In such cases, or those where bank details are not available, how to transfer the subsidy in their accounts is the main challenge,” said the official.

Pointing to the success of DBT in LPG, Finance Minister Arun Jaitley had in the Union Budget 2016-17 announced that the government would also “introduce DBT on pilot basis for fertiliser in a few districts across the country, with a view to improve the quality of service delivery to farmers”.

For 2016-17, the Budget has also pegged the fertiliser subsidy at ₹70,000 crore, lower than the Revised Estimate of ₹72,437.58 crore for last fiscal.

Time for implementation

Officials however, cautioned that a cross country implementation of the proposal could take at least one year as it will require giving soil health cards to all 14 crore farmers as well as seeding land records with the Aadhar numbers.

“The IT infrastructure is yet to be created. Enrolments for soil health cards are already going on while seeding with Aadhar number is also to be done,” said another official.

In the interim, the government is hopeful that neem coating urea will reduce distortions and improve targeting of beneficiaries as it will be difficult to divert the fertiliser for industrial use.