Union Agriculture and Rural Development Minister Shivraj Singh Chouhan addressing to the farmers at the inauguration of Pusa Krishi Vigyan Mela, at Indian Agricultural Research Institute Mela Ground, Pusa Campus in New Delhi on Wednesday
| Photo Credit:
SHIV KUMAR PUSHPAKAR
Union Agriculture Minister Shivraj Singh Chouhan has lent his weight to the long-debated proposal of transferring fertilizer subsidy directly to farmers’ bank accounts. Stating that it “can be done, it is possible,” he instructed officials to begin designing a functional mechanism for the transition.
Inaugurating the annual Kisan Mela, organised by Indian Agricultural Research Institute (IARI) in New Delhi on Wednesday, Chouhan said: “There is a need to undertake reform in this area (fertiliser subsidy). Currently this over ₹1.70 lakh crore goes to companies, which can be directly disbursed to farmers. This is possible, can be done, I think.”
Highlighting that urea bag is available at ₹266/bag (of 45 kg) and that of Di Ammonium Phosphate (DAP) at ₹1,350/bag (of 50 kg), he asked the gathering of farmers, staff of ICAR and others, to guess the market rates of these fertilisers and went on to add that the Centre had paid over ₹1.70 lakh crore of subsidy to farmers to ensure they receive fertilisers at cheap rates.
According to the policy, while urea is completely controlled by the government, the companies are supposed to decide MRP of other fertilisers after factoring the fixed subsidy on nitrogen (N), phosphorus (P), potash (K) and sulphur (S), which is announced twice every year before Kharif and Rabi sowing seasons.
Currently, the subsidy has been fixed at ₹43.02 per kg for N, ₹47.96 per kg for P, ₹2.38 per kg for K and ₹2.87 per kg for S.
The minister pointed out that complaints were received from many quarters that farmers did not receive fertilisers despite so much of supplies and huge susbidy. At some places, the subsidised urea, meant for the farmers, also got diverted.
“The nation should think whether fertiliser subsidy should be directly transferred to bank accounts of farmers,” said Chouhan.
Asking ministry officials to ponder over his suggestion and seeking ICAR’s support, the minister said that there is a need to build consensus, and “let there be a debate”. “We have to find a mechanism (on fertiliser DBT),” he added.
Addressing an event on soil health, organised by think tank ICRIER last month, Niti Aayog Member Ramesh Chand had said that though he had been pushing for direct benefit transfer of fertiliser subsidy from time to time, the issue is much complex and there is no one particular solution. “When I told a group of farmer leaders that if DBT is implemented, farmers will have to pay more than ₹2,000 to buy a bag of urea and not the current ₹267, they never demanded it after that.”
According to an official study, it was found that 65 per cent of farmers in the country had purchased 5-7 bags of urea in the whole year during 2024-25. But, 163 districts out of 330 where fertiliser is used, were found to have consuming 22 lakh bags of urea or 1 lakh tonnes (lt) to 1.8 lt, each.
In the current fiscal the subsidy on P&K was ₹49,000 crore at BE stage, which has gone up to ₹60,000 crore in RE. The allocation of subsidy for P&K, where is India is over 90 per cent import dependent, has been cut to ₹54,000 crore.
Published on February 25, 2026