The fertiliser advisory forum?s (FAF) meeting on Wednesday failed to reach any consensus on direct subsidy to farmers, with chemicals and fertilisers minister Ram Vilas Paswan disagreeing with the finance ministry?s views.
Paswan warned that such a move could have adverse consequences and might lead to inspector raj. ?Direct subsidy to farmers is attractive to hear, but its practical approach in the long term would be scary,? Paswan said at the FAF meeting.
Finance minister P Chidambaram in his budgetary speech for 2007-08 had said the government wanted to implement a pilot programme to prove direct subsidy to farmers in at least one district in each state.
Paswan said department of fertliser was not in favour of direct subsidy. He said FAF?s recommendations would be conveyed to a group of ministers on fertiliser s and it was finally for the government to decide.
The FAF has suggested that list of fertilisers eligible for subsidy should be expanded and actual cost of freight, up to the block-level, should be considered. It said subsidy should be determined on the basis of existing prices of the nutrients from fertilisers such as urea, Di-Ammonium Phosphate (DAP) and MOP.
It has sought changes in the policy so as to encourage use of secondary and micro nutrients and to offer common nutrient prices across the entire range of fertiliser products covered under the subsidy scheme. The forum said the nutrient-based subsidy be extended to all products covered under the fertiliser control order (FCO), in order give farmers a choice linked to soil and crop requirements.
It also discussed the need to introduce new forms of nutrients, particularly water-soluble fertilizers, based on current global experience. The forum has sought necessary policy initiatives to include water-soluble fertilisers under the FCO and the subsidy scheme. It has called for rationalisation of import duty by the state and central a agenies to popularise new products.
The forum felt that to supplement the efforts, made to streamline the marketing and distribution aspects, states needed to strengthen state institutional agencies for marketing and distribution of fertilisers in a time-bound manner.