On Wednesday, the Indian government approved the extension of an additional subsidy on di-ammonium phosphate (DAP) fertilizers beyond December 31, 2024, to maintain the retail price of this crucial fertilizer at Rs 1,350 per 50 kg bag. This move is expected to cost the government up to Rs 3,850 crore. In 2024, the Centre had already announced a special one-time package for DAP at Rs 3,500 per tonne, which was valid from April 1, 2024, to December 31, 2024, with an estimated financial implication of Rs 2,625 crore. This package was intended to ensure that the fertilizer remained affordable for farmers and was provided on top of the nutrient-based subsidy (NBS) for non-urea fertilizers.

On Wednesday, the Union Cabinet, chaired by Prime Minister Narendra Modi, approved the extension of the special DAP package at the same rate of Rs 3,500 per tonne, which will continue from January 1, 2025, until further orders. The decision was made to ensure the continued availability of DAP fertilizers at affordable prices for farmers across the country. According to an official statement, this subsidy will be provided over and above the approved NBS to ensure that farmers have continued access to DAP at reasonable rates.

During a media briefing, Information and Broadcasting (I&B) Minister Ashwini Vaishnaw confirmed that farmers would continue purchasing DAP at Rs 1,350 per bag, with the additional financial burden being covered by the central government. The government has approved a one-time special subsidy package, which could cost up to Rs 3,850 crore. Vaishnaw also pointed out that the global prices of DAP have been volatile due to various geopolitical factors.

The government provides 28 grades of phosphatic and potassic (P&K) fertilizers to farmers at subsidized prices through manufacturers and importers, under the NBS Scheme, which has been in effect since April 1, 2010. The scheme ensures that fertilizers remain affordable for Indian farmers, who depend heavily on them for agricultural productivity. The latest decision underscores the government’s unwavering commitment to maintaining farmer welfare, despite the challenges posed by fluctuating global markets.

The statement from the government emphasized that despite geopolitical tensions and global market volatility, the government has remained committed to ensuring the availability of DAP fertilizers at affordable prices for both the Kharif and Rabi seasons of 2024-25. Over the past decade, the Modi government has significantly increased fertilizer subsidies, with Rs 11.9 lakh crore allocated during the 2014-2024 period, more than double the Rs 5.5 lakh crore subsidy provided during the previous decade (2004-2014). This commitment reflects the government’s focus on supporting the agricultural sector and securing the livelihoods of farmers across India.