Direct fert sops to farmers on cards

Written by Rakesh Sood | New Delhi | Updated: Jul 31 2009, 05:35am hrs
The government has finalised a plan for provision of fertiliser subsidy directly to farmers, eliminating the role of fertiliser companies.

Under the new regime, the sector will be free from the government control and the current maximum retail price system where in fertiliser prices had been kept unchanged since 2002 will go. The prices will be decided by the market forces, a senior official in fertiliser ministry said .

Distribution of subsidy will be made through banks by way of utilising the data of Kisan credit cards and cooperative banks figures on land holdings estimated at 110 million.

Other options include, no frill account or farmers subsidy coupons by which they could procure their fertiliser requirements from the companies, he added. Confirming the move, the secretary fertiliser, Atul Chaturvedi said, A blue print for the scheme is expected to be ready by the last week of August.

A draft- note has been circulated among the officials of the agriculture ministry, Indian Council Agricultural Research and finance ministry .

Once, the draft is finalised, it will be sent for Cabinet approval. Though the issue is politically sensitive, we have to implement the system in the wake of Budget announcement shifting cost-based mechanism to nutrient-based approach of the FM, Chaturvedi added. Under the new scheme, about one dozen inefficient fertiliser firms that cant face new challenge may be closed down. But this will pave the way for new funds.