Subsidy on DAP hiked by 140 percent; Farmers will continue to get a DAP bag for Rs 1200

In another pro- farmer decision, the Centre on Wednesday hiked the subsidy on DAP fertilizer by 140 per cent, costing the exchequer an additional amount of Rs 14,775 crore, in an effort to ensure the soil nutrient is available to farmers at old rates in spite of a sudden hike in global prices. 

The central government has decided to increase the subsidy for diammonium phosphate (DAP) fertilizer to Rs 1200 a bag of 50 kg from Rs 500. It will help farmers continue to avail DAP at the existing rate of Rs 1,200 a bag, despite a jump in its actual price due to higher raw material cost. That’s the highest ever subsidy given on DAP in one go. 

“The hike in subsidy will put an additional financial burden of Rs 14,776 crore on the central government, which spends around Rs 80,000 crore on subsidies for chemical fertilizers every year,” a senior fertilizer ministry official said. 

This historic decision was taken at a high- level meeting chaired by the Prime Minister who said the government is committed to the welfare of farmers and will take all measures to ensure that farmers do not have to face the shock of price hike. 

Recently, the global prices of chemicals like ammonia, phosphoric acid and other raw materials used in DAP hiked up by 60- 70%, further increasing the actual price of DAP to Rs 2,400 from Rs 1,700 last year. 

The government was providing a subsidy of Rs 500 per bag. Due to that, without the hike in subsidy, fertilizer industry and companies would have sold DAP at Rs 1,900 a bag to farmers. But with this pro- farmer decision, there will be no change in prices and farmers would be able to purchase the fertilizer at the existing price of Rs 1,200,” the official said in a statement. 

Previous year, after the Rs 500 subsidy, companies were selling DAP to farmers at Rs 1,200 per bag.