Cabinet Approves Rs 3,850 Crore Special Package For DAP Fertilisers

The government has approved the extension of a one-time special package of Rs 3,850 crore for diammonium phosphate fertilisers on Wednesday. Farmers will get DAP at Rs 1,350 per bag of 50 kg; however, the extra burden will be borne by the government, said Union Minister Ashwini Vaishnaw in a press conference.

Geopolitical tensions and war situations have made the global market prices of DAP more volatile, Vaishnaw said on Wednesday. The extension on the package is beyond the National Budget Support subsidy of Rs 3,500 per MT.

This move by the government is to ensure farmers can buy DAP at a subsidised, affordable, and reasonable price.

A total of 28 grades of P&K fertilisers are made available to farmers at subsidised rates through manufacturers and importers. The subsidy on P&K fertilisers is governed by the NBS Scheme, effective from April 1, 2010.

In July 2024, the Cabinet approved a one-time special package for DAP, providing an additional subsidy of Rs 3,500 per metric tonne beyond the NBS subsidy, from April 1 to Dec. 31, 2024, with an estimated financial impact of Rs 2,625 crore.

Prime Minister Narendra Modi hailed the cabinet's decision, saying the policies are aimed at enhancing the prosperity for Indian farmers.

"Ours is a Government fully committed to furthering welfare of farmers. We are proud of all our farmer sisters and brothers who work hard to feed our nation. The first Cabinet of 2025 is dedicated to enhancing prosperity for our farmers. I am glad that key decisions have been taken in this regard," the PM said in a post on X.

The Modi cabinet on Wednesday also approved the continuation of the PM Fasal Bima Yojana and Restructured Weather Based Crop Insurance Scheme till 2025-26 with an overall outlay of Rs 69,515.71 crore from 2021-22 to 2025-26.

The PMFBY is a government-sponsored crop insurance scheme launched in 2016 that provides financial aid to farmers for crop loss due to unforeseen events like extreme weather events.

The cabinet also cleared plans for large-scale technology infusion in the implementation of the crop insurance scheme to increase transparency and claim calculation and settlement. The government will set up the Fund for Innovation and Technology (FIAT) with a corpus of Rs 824.77 crore.

The fund will be utilised towards funding technological initiatives under the scheme, namely, YES-TECH, WINDS, etc., as well as research and development studies, the statement said.