KATHMANDU, MARCH 13
The government has reduced the subsidy given to farmers on the purchase of chemical fertilisers.
According to the Ministry of Agriculture and Livestock Development, a meeting of the Fertiliser Supply and Distribution Management Committee decided to reduce the previously given subsidy of 70.82 per cent and maintain it at 59.04 per cent for the meantime.
The subsidy rate will gradually be reduced to 50 per cent, as per a statement issued by the ministry.
Following the decision, urea fertiliser will cost Rs 25 per kg, DAP fertiliser at Rs 50 per kg, and potash fertiliser at Rs 40 per kg. Earlier, urea was sold at Rs 14 per kg, DAP at Rs 43 per kg and potash at Rs 31 per kg. The prices for the listed fertilisers have been increased by Rs 11, seven rupees, and nine rupees per kg, respectively.
Earlier, the government was providing subsidy of 80 per cent on urea, 60 per cent on DAP and 59 per cent on potash. The subsidy has been reduced to 64.49 per cent for urea, 52.38 per cent in DAP and 46.09 per cent in potash.
According to the ministry, this decision was made following the request of the Ministry of Finance to reduce the subsidy given on the procurement of chemical fertilisers. Stating that the prices of chemical fertilisers have increased at the international level, the ministry informed that the government is also losing a big portion of the budget due to the high cost of imports and high subsidy given on the sale of chemical fertilisers to the farmers.
According to the ministry, as much as 520,000 metric tonnes of chemical fertilisers are required in the country annually. The government has already allocated a budget of Rs 38.5 billion to provide subsidies for chemical fertilisers. The government has allocated Rs 15.6 billion to provide subsidies to farmers in fertilisers, Rs 16 billion for resource assurance, and resource agreement of Rs 7.5 billion in the current fiscal year.
So far, the procurement process of 331,500 metric tonnes of chemical fertilisers from India has already started from Krishi Samagri Company Ltd and Salt Trading Corporation under G2G (government-to-government) provision, according to the ministry. About 237,500 metric tonnes of fertilisers purchased in this way have been imported and 94,000 metric tonnes are yet to be imported. The ministry has also informed that the country is still facing a shortfall of 90,000 metric tonnes of fertilisers for the rice planting season this year. The ministry is working towards importing the required fertilisers by utilising Rs 7.50 billion received for resource assurance from the government.
The ministry has further clarified that the decision will also help to address the problems faced by farmers who have been forced to buy fertilisers at an expensive rate alongside the increasing activity of black markets due to the cheapness of subsidised fertilisers.
A version of this article appears in the print on March 14, 2023, of The Himalayan Times.
