“We can’t subsidize chemical fertilizers for farmers at all levels in view of our limited resources. Targeted beneficiaries in the first phase are small land holders,” Dr. Hari Dahal, spokesperson of the Ministry of Agriculture and Cooperatives (MoAC), told myrepublica.com.
Referring to fertilizer distribution guidelines which MoAC has prepared for the Agricultural Inputs Company Limited (AICL), importer and distributor of subsidized fertilizer for the government, Dahal said the government’s price subsidy for fertilizer is applicable across the country and a transport subsidy will also be provided in 26 deficit districts.
Given the limited quantity of subsidized fertilizer being proposed, the government is subsidizing only 50 percent of the total quantity recommended by local technicians for a given amount of land.
Average consumption of chemical fertilizer in the country stands at 20 kg per hectare, far lower than the 131 kg per hectare by 2015 envisaged by the Agriculture Perspective Plan.
Dahal also said that beneficiary farmers will get a subsidy for only three crops depending on the geographic location of their farms.
To the relief of small-holding farmers, the government has decided to reinstate subsidy for chemical fertilizers after a gap of a decade. Though the government plans to provide 100,000 tons of fertilizer per year the target is not going to be met due to delay in initiating the imports process and budget constraints.
MoAC has demanded an extra Rs 1.75 billion in coming fiscal year.
Out of the annual target the government has decided to procure 32,500 tons of fertilizer through AICL from India.
As per the government’s estimate, the annual consumption of chemical fertilizer hovers around 300,000 tons, most of which has been distributed by private importers.
According to Dahal, AICL has already begun the process of importing 2,500 tons of Urea fertilizer from India and 12,500 tons from overseas markets for the coming paddy season.
The government has also formed a high-level Fertilizer Supplies and Distribution Management Committee under the coordination of the secretary at MoAC. The committee has been entrusted with arranging regular supply and monitoring the market.
The government´s decision is a major policy rollback. The government had decided in 1997 to remove subsidy from agricultural inputs, opening the prices to market forces.
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