Low awareness of fertilizer subsidy: A challenge to subsidy reforms
The government has been considering a policy shift to transfer the fertilizer subsidy amount to the bank accounts of farmers rather than fertilizer companies. In our pan-India study with farmers we found that only one-third of the farmers knew that they purchase fertilizers at a subsidized rate. With such low awareness levels, this policy shift may evoke shock and displeasure since this would require farmers to first purchase fertilizers at the market price.
The Government of India has introduced various reforms to enhance efficiency and transparency in the fertilizer distribution system. However, differential fertilizer policies in India have led to the overuse of urea among farmers, which creates an imbalance in soil health. This SI module highlights some reforms to encourage the judicious and efficient use of fertilizers by farmers.
MicroSave conducted an assessment of fertilizer subsidy, the second-largest subsidy after food that GoI provides, in 14 districts across India. This report captures the key findings and actionable solutions for its smooth implementation.