Government extends DAP fertilizer subsidy to maintain affordable prices for farmers

Govt approves one-time special package of up to Rs.3,850 crore for DAP fertilizer

The Indian government has extended the additional subsidy on di-ammonium phosphate (DAP) fertilizer beyond December 31, 2024, ensuring the retail price remains at Rs.1,350 per 50-kg bag. The move, approved by the Union Cabinet chaired by Prime Minister Narendra Modi, is expected to cost the exchequer up to Rs.3,850 crore.

Subsidy extension details

Last year, the government introduced a one-time special package for DAP at Rs.3,500 per tonne, effective from April 1, 2024, to December 31, 2024, with a financial outlay of Rs.2,625 crore. The subsidy was provided in addition to the existing nutrient-based subsidy (NBS) for non-urea fertilizers.

On Wednesday, the Cabinet approved the continuation of this package at Rs.3,500 per tonne from January 1, 2025, until further notice. The decision aims to ensure the sustainable availability of DAP at affordable prices for farmers, according to an official statement.

Government commitment to affordable fertilizer

The Information and Broadcasting Minister, Ashwini Vaishnaw, assured farmers that DAP prices will remain unchanged at Rs.1,350 per bag, with the Central government bearing the additional financial burden.

“Despite volatile global DAP market prices due to geopolitical concerns, the government remains committed to supporting farmers by ensuring the availability of DAP at affordable rates,” Vaishnaw stated.

Overview of fertilizer subsidies

The government provides subsidies for 28 grades of phosphatic and potassic (P&K) fertilizers under the NBS scheme, which has been in effect since April 1, 2010. The extended package will be provided over and above the NBS to stabilize DAP prices and availability.

The Modi government highlighted its sustained efforts to support farmers, noting that Rs.11.9 lakh crore in fertilizer subsidies has been provided between 2014 and 2024—more than double the Rs.5.5 lakh crore allocated between 2004 and 2014.

Ensuring farmer welfare

In its statement, the government emphasized its farmer-centric approach, despite challenges posed by geopolitical constraints and fluctuating global market conditions. The subsidy extension will support affordable DAP prices during the Kharif and Rabi seasons of 2024-25.

By maintaining the price of DAP fertilizer and extending financial relief to farmers, the government aims to bolster agricultural productivity and uphold its commitment to the farming community.

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