India's Fertiliser Subsidy Costs Up To 182% More Than Benefits Delivered To Farmers, Study Finds
Lucknow: India's fertiliser subsidy system is imposing a much higher cost on the economy than the direct financial benefits it provides to farmers, with hidden environmental and fiscal costs pushing the overall burden up by 36 to 182 per cent, according to a new study by Climate Trends. The study, titled The Economics of Cultivation, argues that India's fertiliser pricing policy, which keeps…
Lucknow: India's fertiliser subsidy system is financially burdensome to the nation, according to a new study. The Environmental Impact and Economic Burden of Fertiliser Subsidies report by Climate Trends finds the overall cost to be 36 to 182 per cent higher than the direct benefit to farmers. The fixed price of urea leads farmers to use excessive nitrogen, decreasing efficiency by 50 per cent since 1970, while simultaneously contaminating soil and groundwater.
Urea prices surged 53.7 per cent in February 2026, straining the government's finances due to disruptions in global gas supplies. Organic farming could potentially be more profitable, with a 5-7 per cent price premium enough to break even. Transitioning to low-input cultivation could save Rs 1,155 crore annually, but a phased approach is recommended to ensure success.
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