IFFCO calls for paying fertiliser subsidy directly to farmers

New Delhi, Aug 6 (UNI) While the fertiliser subsidy is expected to cross a whopping Rs 25,000 crore by the end of current fiscal, IFFCO has opposed its disbursement through the fertiliser manufacturers, mainly in private sector and suggested that the payment be made directly to the farmers.

Indian Farmers Fertiliser Cooperative Ltd (IFFCO), which contributes around one-fourth of total production of the fertilisers in the country, is ready to tie up with banks for introducing smart cards, entitling the farmers to draw their admissible amount of subsidies.

The current subsidy regime had resulted in lack of competitiveness and efficiency, IFFCO Managing Director U S Awasthi said giving credence to the criticism that the subsidy arrangement had sustained the obselete and non-competitive units in the country.

The Standing Committee on Chemicals and Fertilisers in its 13th report submitted in the Lok Sabha last week also recommended that subsidies be paid directly to the farmers. It said the poor and marginal farmers should be categorised on the lines of the scheme of providing subsidised foodgrains to the people below poverty line (BPL).

The government should purchase fertilisers at higher market rates and 'supply the same at the subsidised rates directly to the category of poor and marginal farmers', suggested the committee report.

The committee, also said it 'trusts that the government would examine its suggestion at the time of finalising the of Stage three of the New Pricing Scheme (NPS) commencing with effect from April first this year.

However, the Department of Fertilisers (DoF) has been opposing the direct payment of fertiliser subsidy to the farmers, as it introduced the Retention Price Scheme (RPS) in 1977.

Under the RPS, the subsidy goes directly to the fertiliser industry as a difference between the cost of production of a unit and Maximum Retail Price (MRP) at which the government supplies fertiliser to the farmers.

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