India Extends DAP Subsidy; Farmers Criticize Policy Favoring Corporates

The Indian Union Cabinet, chaired by PM Narendra Modi, has extended a special subsidy package for Di-ammonium Phosphate (DAP) beyond the standard Nutrient Based Subsidy (NBS) at an additional USD 448.8M from 1 Jan until further notice. This ensures farmers continue to obtain DAP at an unchanged retail price of INR 1,350 per 45 kg bag. With this, total additional subsidies since April 2024 surpass USD 754.8M. It must be noted that both wheat and potato sowing periods are over and farmers will need DAP only in the next sowing season. Govt. officials say this measure will help buffer domestic farmers from global market volatility and geopolitical constraints that have driven up import costs, especially given India’s high reliance on overseas supplies for phosphorus and potassium fertilizers. The announcement follows an earlier one-time special package of USD 306M from April through December 2024, and the Cabinet’s latest move is aimed at ‘sustainable availability’ of DAP at affordable prices. The All India Kisan Sabha (AIKS) criticized the extension, alleging it benefits corporate profits more than farmers’ interests. AIKS highlighted how fertilizers such as Muriate of Potash have seen steep price hikes over the years, while total fertilizer subsidies have decreased in consecutive budgets. They also point to India’s dependence on a handful of global suppliers who control major mineral resources, pushing profit margins up to 36% for some fertilizer companies. AIKS warns that these dynamics—combined with rupee depreciation, black market scarcity, and incomplete domestic production—pose heightened risks to Indian farmers, potentially undermining the govt.’s stated aim of securing the nation’s food supply. Meanwhile, Panjab CM Bhagwant Singh Mann warned the Union govt. against reviving three repealed farm laws ‘through backdoor,’ calling the draft New Agriculture Export policy an attempt at reintroducing them (WD Vol 2, Issue 48, Story 3).