Indian farmers are already suffering from high input costs and the steep increase in fertilizer prices are going to be more burden for them. India imports a quarter of urea, 100% of potash and almost 70% of DAP (Diammonium Phosphate). DAP is widely used by Indian farmers, the price has gone up to Rs.987 per bag( 50 Kilos) and it is expected to be increased more with rupee dip. similarly Potash has increased to Rs.720 per bag( 50 Kilos). Not only the fertilizers and also the pesticides, insecticides and herbicides prices have affected by rupee slide. Acetamiprid (ACE) and Imidacloprid (IMI) are widely used pesticides in India, their prices have also increased by Rs.100.
The price of fertilizers and pesticides may increased by 30% due to rupee value decline and subsidy cuts. The government has decreased the subsidy on DAP and other NPK (Nitrogen, Phosphorous, and Potash) fertilizers by 27% since April 2012, the subsidy for DAP was Rs 19,763 in last fiscal year now it is Rs 14,350 per tonne similarly the subsidy for MOP (Muriate of Potash) has been fixed at Rs 14,440 per tonne against Rs 16,054 last fiscal. The subsidies for nitrogen, phosphate and potash nutrients have also been lowered by 11.6%, 32.6% and 10.3% respectively. The raw materials for producing fertilizers prices have also increased due to rupee depreciation. so invariably, the kharif crops going to be very expensive for farmers with raised input costs.
Every Farmer need subsidies since they have been incurred losses without remunerative prices, non availability of credit ,high input costs and many more adverse reasons. If the government feels the subsidy on fertilizers must be reduced then it should allow the farmers to fix the prices for their produces on their own like other industries and also the government should not intervene in agriculture exports. The UPA government has randomly increasing the petrol prices to save the Oil marketing companies from their losses, why can't the government do the same thing for the farmers by fixing the remunerative prices for farm produces. In fact, the government reduced the fertilizer subsidies as part of their austerity measure to match the fiscal deficit but the government is claiming that the reduced subsidy funds are going to be diverted to organic manures and bio fertilizers. Actually the organic farmers are very less, organic farming is picking up but reducing the subsidies on chemical fertilizers are ridiculous since 90% of the farmers are depend on the same.
Ministry of chemicals and fertilizers has intended to give the subsidies directly to the farmers, it's a welcome move because the retailers are misusing the subsidies and it's not reaching to the real beneficiaries. At this point of time the government officials should ensure the fertilizers are sold at MRP prices and most of the retailers might have the old stocks which they got with old prices, they are trying to sell the same stock with new increased prices, the government officials must control the traders not to sell with increased prices. At least it will give little relief to farmers against the increased input costs.