Government enhances DAP fertiliser subsidy

PM Modi okays ₹1200 subsidy per bag to retain existing price for farmers, as input costs soar.

The government has enhanced the subsidy on di-ammonium phosphate or DAP fertilisers in order to retain the selling price for farmers at the current level of ₹1200 per bag, following a review meeting on fertiliser prices chaired by Prime Minister Narendra Modi on Wednesday.

The move, which entails raising the subsidy from ₹500 per bag to ₹1200 per bag of DAP, will raise India’s annual fertiliser subsidy bill of about ₹80,000 crore by ₹14,775 crore as subsidy in the Kharif season, a statement said.

While international prices of phosphoric acid and ammonia used for producing DAP have gone up by 60%-70%, the actual price of a DAP bag is now ₹2,400, the government said. With the existing subsidy, the price would have to be pegged at ₹1900 per bag, but it has been retained at ₹1200 per bag.

In April, India’s largest fertiliser producer IFFCO had announced a 58.33% hike in DAP prices, but later said that farmers will continue to get old stocks at existing prices and the hiked prices were ‘only tentative’ and used for printing on bags for dispatching newly produced fertilisers.

“The PM stressed that farmers should get fertilisers at old rates despite the international rise in prices and said his government is committed to the welfare of farmers and will take all efforts to ensure that farmers do not have to face the brunt of price-rise,” the official statement said, calling this an unprecedented subsidy hike.

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