Home / Industry / Agriculture /  Cabinet okays 51,875 cr fertilizer sops

NEW DELHI : The Cabinet Committee on Economic Affairs on Wednesday approved a 51,875 crore subsidy for phosphatic and potassic fertilizers for the rabi season along with higher procurement price of ethanol for public sector oil marketing companies in moves it described as buttressing its “farmer-friendly approach".

The hike in procurement price will support sugarcane farmers.

“In accordance with its farmer friendly approach, the government is committed to ensure the availability of P&K (phosphatic and potassic) fertilizers to the farmers at affordable prices," the petroleum ministry said.

The ministry of chemicals and fertilizers said the decision to provide subsidy for phosphatic and potassic fertilizers will facilitate their easy availability to farmers during Rabi 2022-23 (October-March) at affordable prices and support agriculture.

The CCEA approved a subsidy of 98.02 per kg for nitrogen (N), 66.93 per kg for phosphorus (P), 23.65 per kg for potash (K) and 6.12 per kg for sulphur (S).

The ministry noted that the volatility in the international prices of fertilizers and raw materials had been primarily absorbed by the Centre.

The subsidy on P&K fertilizers, which includes support for indigenous fertilizer through freight subsidy, will be provided on the basis of the nutrient-based subsidy (NBS) rates approved by the CCEA.

Under the nutrient-based subsidy scheme, which has been implemented since 2010, the government announces a fixed rate of subsidy (in per kg) on four nutrients—Nitrogen, Phosphate, Potash and Sulphur—every year.

In the other major related decision, the cabinet approved to increase the procurement price of ethanol made from C-heavy molasses from 46.66 to 49.41 per litre. The price of ethanol from B-heavy molasses was hiked from 59.08 per litre to 60.73 per litre, the petroleum and natural gas ministry said.

The price of ethanol from sugarcane juice, sugar or sugar syrup has been raised from 63.45 to 65.61 per litre, it said. Additionally, GST and transportation charges will be payable.

All distilleries will be able to take benefit of the scheme and a large number of them are expected to supply ethanol for the blended petrol programme, the Cabinet said.

Remunerative price to ethanol suppliers will help in early payment to cane farmers, in turn helping alleviate the difficulties faced by sugarcane farmers, it noted.

In view of the steep increase in the international prices of fertilizers and inputs i.e. Urea, DAP, MOP and Sulphur, the government has decided to absorb the increased prices by increasing subsidy on P&K fertilizers including DAP.

Petroleum minister Hardeep Singh Puri told reporters, “We have saved about 40,000 crore in forex outgo from 10% blending besides benefiting the farmers." He added the pilot to offer E-20 (petrol with 20% ethanol) will start from April 2023 at select petrol pumps.


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