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New Delhi: Urea is provided to the farmers at a statutorily notified Maximum Retail Price (MRP) irrespective of the cost of production.
The subsidized MRP of a 45 kg bag of urea is Rs.242 per bag (exclusive of charges towards neem coating and taxes applicable). The difference between the delivered cost of urea at the farm gate and net market realization by the urea units is given as a subsidy to the urea manufacturer/importer by the Government of India. Accordingly, all farmers are being supplied urea at subsidized rates.
In the case of Phosphatic and Potassic (P&K) fertilizers, the Government has implemented a Nutrient Based Subsidy (NBS) Policy w.e.f. 1.4.2010. Under the policy, a fixed amount of subsidy decided on an annual/bi-annual basis is provided to manufacturers/importers on subsidized P&K fertilizers depending on their nutrient content i.e. Nitrogen (N), Phosphorus (P), Potassium (K) and Sulphur (S) to improve the availability of fertilizers to farmers. Import of P&K fertilizers is decontrolled and companies are free to import/produce fertilizer raw materials, intermediaries and finished fertilizers as per their business dynamics. However, the Government monitors international prices of key fertilizers and raw materials and fluctuations, if any, are subsumed while fixing NBS rates for P&K fertilizers annually / bi-annually.
The Government has ensured the smooth availability of fertilizers at affordable prices despite recent geo-political situations due to the Russia – Ukraine war by providing special packages over and above the NBS subsidy rates on a need basis so that the Maximum Retail Price (MRP) of the fertilizers remains stable and market volatility are subsumed. The Government has provided special/additional packages over and above NBS rates twice in Rabi 2021-22, then in Kharif 2022, Rabi 2022-23, and Kharif & Rabi 2024.
Further, in order to diversify its sources, the Government of India engages with fertilizer resource-rich countries and facilitates the signing of Long Term Agreements between Indian fertilizer companies and suppliers from resource-rich countries for the supply of fertilizers/intermediates / raw materials to India.
This information was given by the Union Minister of State for Chemicals and Fertilizers Smt Anupriya Patel in Rajya Sabha in reply to a question today.
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