NBS Scheme for fertilizer

NBS Scheme for fertilizer

NUTRIENTS BASED SUBSIDY (NBS)

It’s over a decade since a so-called nutrient-based subsidy (NBS) regime for fertilisers was instituted. By linking subsidy to nutrient composition rather than products per se, NBS was expected to wean away farmers from applying too much urea containing only nitrogen. But the actual results prove otherwise. Between 2009-10 and 2019-20, urea consumption rose from 26.7 million tonnes (mt) to 33.7 mt. While overall fertiliser consumption increased from 53.4 mt to 61.7 mt, urea’s share went up from below half to 54.6 per cent during this period. The reason for the worsening fertiliser imbalance is simple: Since April 2010, the maximum retail price (MRP) of urea has been raised by hardly 11 per cent, from Rs 4,830 to Rs 5,360 per tonne. The MRPs of other fertilisers — which were decontrolled, with the government only giving a per-tonne subsidy based on their nutrient content — have gone up from 2.5 to four times during these 10 years. Since NBS has been implemented only in other fertilisers, even as urea remains under price control, farmers are using more, not less, of the latter.

The Narendra Modi government must shoulder much of the blame for this agronomic and environmental disaster. The basic MRP of urea hasn’t been revised at all in its nearly six-and-a-half years. Instead of bringing urea under NBS — which would push up its MRP closer to Rs 10,000 per tonne at the current per-kg subsidy for nitrogen present in other fertilisers — the Modi government has resorted to tinkering at the margins. That includes compulsory neem-coating of all urea (from December 2015) and making fertiliser subsidy payment to companies conditional upon actual sales to farmers being registered on point-of-sale machines with retailers after biometric authentication (from March 2018). There’s a plan next, as reported by this newspaper, to cap the total number of subsidised fertiliser bags that any person can purchase during an entire cropping season. But these measures merely address the issue of subsidised fertilisers, especially urea, getting diverted to bulk buyers/traders or even non-agricultural users such as plywood and animal feed makers. They don’t fix the real problem — of overuse by farmers themselves. If urea is heavily under-priced, they will apply three bags when two or less would suffice.

IMPORTANT POINTS

 The NBS Scheme for fertilizer was initiated in the year 2010 and is being implemented by the Department of Fertilizers, Ministry of Chemicals and Fertilizers.

• Under the scheme the government is making available fertilizers, Urea and 21 grades of P&K fertilizers to farmers at subsidized prices through fertilizer manufacturers/importers.

• As part of the scheme a fixed amount of subsidy decided on an annual basis is provided on each grade of subsidized Phosphatic and Potassic (P&K) fertilizers, except for Urea based on the nutrient content present in them.

• It is largely for secondary nutrients like N, P, S and K and micronutrients which are very important for crop growth and development.