Nutrient Based Subsidy (NBS)
Source : PIB
GS III : Issues related to direct and indirect farm subsidies and minimum support prices; Public Distribution System- objectives, functioning, limitations, revamping; issues of buffer stocks and food security; Technology missions; economics of animal-rearing.

Why in News ?

Cabinet Committee on Economic Affairs has approved the proposal of the Department of Fertilizers for fixation of Nutrient Based Subsidy Rates for P&K Fertilizers for the year 2021-22.

P&K : Phosphatic and Potassic

Key Facts

• Government of India is making available fertilizers namely Urea and 22 grades of P&K fertilizers (including DAP) to farmers at subsidized prices through fertilizer manufacturers/ importers.
• The subsidy on P&K fertilizers is being governed by NBS Scheme.
• The subsidy is released to fertilizer companies as per NBS rates so that they can make available fertilizers to farmers at affordable price.

Diammonium phosphate (DAP) is the world’s most widely used phosphorus fertilizer

What is Nutrient Based Subsidy (NBS) ?

• The fertilizers are provided to the farmers at the subsidized rates based on the nutrients (N, P, K & S) contained in thes

  

  e fertilizers initiated in the year 2010. 

• The scheme allows the manufacturers, marketers, and importers to fix the MRP of the Phosphatic and Potash fertilizers at reasonable level.
• MRP will be decided considering the domestic and international prices of P&K fertilizers, inventory level in the country and the exchange rates.
• The subsidy on Phosphatic and Potassic (P&K) fertilizers is announced by the Government on an annual basis for each nutrient on a per kg basis.
• This would improve soil health and as a result the yield from the crops would increase resulting in enhanced income to the farmers.
• Also aims to increase the consumption of P&K fertilizers which will result in balanced fertilization.

The MRP of urea is statutorily fixed by the Government of India. That meas urea is outside NBS.

Need for NBS On P&K ?

• International prices of raw materials of DAP and other P&K fertilizers have increased sharply.
• Prices of finished DAP etc. in international market have also increased.
• DAP prices in India were initially not increased by the companies however, some companies increased the DAP price in the beginning of this financial year.
• Government has already asked all the fertilizer companies to sell their old stocks of DAP etc. at the old prices only.
• Gol has increased the subsidy rates under NBS Scheme as a special package for farmers in such a way that MRP of DAP (including other P&K fertilisers) can be kept at the last year’s level till the present Kharif season.

Phosphatic and Potassic (P&K) Policy

• Under the NBS Policy a fixed rate of subsidy is announced on nutrients namely Nitrogen (N), Phosphate (P), Potash (K) and Sulphur (S) by the Government on annual basis.
• The per Kg subsidy rates on the nutrient N, P, K, S is converted into per Tonne subsidy on the various P&K fertilizers covered under NBS Policy.
• Any variant of the fertilizers covered under the subsidy scheme with micronutrients namely Boron and Zinc, is eligible for a separate per tonne subsidy to encourage their application along with primary nutrients.
• At present 22 grades of P&K fertilizers namely DAP, MAP, TSP, MOP, Ammonium Sulphate, SSP and 16 grades of NPKS complex fertilizers are covered under the NBS Policy.

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