Fertilizers Subsidy and Agricultural Productivity

The total expenditure on subsidy/concession for all fertilizers during the year 2001-02 was Rs. 12695.02 crores (Gross) and during 2009-10, the expenditure was Rs. 64,032.29 crores (Gross).

The average productivity of food grains was 1734 kg/ha during the year 2001-02 and this has increased to 1798 kg/ha during the year 2009-10. This was stated by the Minister of State for Chemicals & Fertilizers Shri Srikant Kumar Jena in a written reply in the Rajya Sabha today. He said there is no positive correlation between fertilizer subsidy and agricultural productivity.

Fertilizer subsidy is the difference between the normative delivered cost of fertilizers and the notified selling prices of the subsidized fertilizers. The subsidy is provided to fertilizer manufacturers/importers to covers the gap between the normative delivered costs of subsidized fertilizers and the notified selling prices (MRPs) at the farm gate level. Accordingly, subsidy is disbursed to farmers in the form of subsidized fertilizers.

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DNM/PKM/SB