Modi Government’s next massive Reform will change the Agriculture Sector forever: Do you know what it is?

Since May 2014, Modi government has unleashed a string of reforms in various areas and domains, most of them were to improvise the basic structure of that specific area. BE it Demonetization, implementation of GST, DBTL or decreasing subsidy for Petroleum products.


All the above steps have given Central Government a much needed confidence to go ahead with further reforms in other untouched areas as well. Here we are talking about the Agriculture Field, it is undoubtedly the most important area which generates huge number of jobs and revenue for the government. Unfortunately Agriculture is mired with lots of corruption and negligence for ages, however it seems Modi Government has decided to change the scenario.


Modi government has started an initiative to identify final buyers of fertilizers, and for that government has started taking biometric imprints of Farmers.This initiative aims to generate long-term savings by preventing the heavily-subsidized farm nutrients getting smuggled into neighboring countries like Nepal and Bangladesh and stopping their diversion for industrial purposes. It is also important to boost agricultural output and provide food security.


This initiative will follow with a program to directly provide subsidy to millions of consumers of cooking gas, dismantling a previous practice of paying suppliers to keep retail prices low.


The annual Fertilizer subsidy bill for this year is approx. 700 Billion Rupees (11 Billion Dollars), this amount is huge and it is more than double the fuel subsidy and the biggest after food. When it comes to subsidies, the Modi government moves cautiously to avoid irking voters in the agriculture sector that employs about half of the country’s total workforce.


However, it wants to keep an eye on the end users by linking purchases to buyers’ national identity cards. After successfully completing the pilot project, it aims to expand it to the entire country by the end of March.


It will be more than data capturing, it’s like the government sitting with the farmer and paying the subsidy. The subsidy will be paid on actual sales. It will totally stop leakages and lead to the balanced use of fertilizers.


Tackling and curbing Smuggling of Fertilizers

Under this initiative, farmers may have to produce their identity proofs to buy fertilizers. The system could help in stopping smuggling by alerting the authorities about abnormal purchases by individuals, prompting investigations.


The pilot trials show shortages have come down, overcharging by retailers has been reduced, diversion is down and farmers are scared to buy large quantities, as they know any unusual purchase could alert the Authorities.


To cut down the Subsidy Bill

The government also aims to cut the subsidy bill by promoting balanced use of soil nutrients. It plans to expand an existing program of testing farmers’ fields and issuing soil health cards, which recommend an ideal composition of fertilizers for a particular piece of agricultural land.


Government will also control the excessive use of Urea, currently it accounts for more than 50 percent of the country’s total fertilizer consumption. It has deteriorated the health of farmlands in many parts of the country. The nitrogen-based nutrient is the cheapest at the retail level due to the government’s subsidy of about 67 percent of the cost of production and profit charged by companies, against around 29 percent for di-ammonium phosphate and about 46 percent for potash.


Use of Technology and Machines

Modi government has been insisting on heavy use of Technology and Machines for so long. Complying with the same, the Indian fertilizer makers are installing about 200,000 point of sale machines at retail outlets.


Indian Farmers Fertilizer Cooperative Limited, has installed about 50,000 special fertilizer sale machines across the country and is planning to add about 8,000 more to make up for any technical failures.

Manish Sharma