The Cabinet will on Thursday consider a new policy to give nutrient-based fertiliser subsidy directly to farmers instead of the industry.
Under the new policy framework prepared by a Group of Ministers headed by finance minister Pranab Mukerjee, each district of the country will have a laboratory to test nutrient quality of the soil.
To avail of the subsidy, a farmer will have to get the soil test done at the laboratory. The government will give subsidy to the farmer only for those chemicals, which are found to be deficient in the soil. “This will helping in improving the soil quality, which in states such as Punjab and Haryana has deteriorated because of extensive use of fertilisers,” a government official said.
The price of each nutrient will be uniform across all subsidised fertilisers and the selling price of the fertiliser will be determined on the basis of the nutrients in it.
The government aims to keep the fertiliser prices under check, which has increased five times between 2004 and ’09. It will also reduce the Centre’s annual fertiliser bill of Rs 1,00,000 crore substantially. If the present system continues, the government is estimated to spend Rs 1,73,000 crore on fertiliser subsidy by 2011-12, the end of the 11th plan period.
The Cabinet is also expected to look into the India-US agreement on agriculture cooperation and food security.
“A MoU on Agricultural Cooperation and Food Security will set a pathway to robust cooperation between the governments in crop forecasting, management and market information, regional and global food security, science, technology, and expanding private sector investment in agriculture,” a White House statement issued at the time of Prime Minister’s visit, said.