- To reduce the use of chemical fertilisers the Government is Planning to Launch the PM PRANAM (Promotion of Alternate Nutrients for Agriculture Management Yojana) Scheme.
- To encourage the balanced use of fertilisers in conjunction with biofertilisers and organic fertilisers.
- To bring down the subsidy burden on chemical fertilisers, which is estimated to reach Rs 2.25 lakh crore in 2022-23 — 39% higher than 2021 figure of Rs 1.62 lakh crore.
- Features of the Proposed Scheme:
- The scheme will have no separate budget and will be financed through the “savings of existing fertiliser subsidy” under schemes run by the Department of Fertilizers.
- 50% of subsidy savings will be passed on as a grant to the state that saves the money.
- 70% of the grant provided under the scheme can be used for asset creation related to the technological adoption of alternate fertilisers and alternate fertiliser production units at the village, block and district levels.
- The remaining 30% grant money can be used for rewarding and encouraging farmers, panchayats, farmer producer organisations and self-help groups that are involved in the reduction of fertiliser use and awareness generation.
- The calculation of reducing chemical fertiliser use of urea in a year will be compared to the average consumption of urea during the last three years.
- For this purpose, data available on a Fertilizer Ministry dashboard, IFMS (Integrated Fertilizers Management System) will be used.
Need for this Scheme
- Farmers buy fertilisers at Maximum Retail Prices (MRP) below their normal supply-and-demand-based market rates or what it costs to produce/import them.
- For example, the MRP of neem-coated urea is fixed by the government at Rs. 5,922.22 per tonne, whereas its average cost-plus price payable to domestic manufacturers and importers comes to around Rs. 17,000 and Rs. 23,000 per tonne, respectively.
- The difference, which varies according to plant-wise production cost and import price, is footed by the Centre as a subsidy, which goes to the companies.
- The MRPs of non-urea fertilisers are decontrolled or fixed by the companies. However, the Centre pays a flat per-tonne subsidy on these nutrients to ensure reasonable prices.
- The per-tonne subsidy ranges from Rs. 10,231 to Rs. 24,000 for different types of fertilisers.
- The Centre pays subsidy on urea to fertiliser manufacturers on the basis of cost of production at each plant and the units are required to sell the fertiliser at the government-set Maximum Retail Price (MRP).
SOURCE: THE HINDU,THE ECONOMIC TIMES,MINT