Government reduces subsidy in chemical fertilizer

The government has reduced subsidy it has been providing to farmers purchasing chemical fertilizers.

As per the Ministry of Agriculture and Livestock Development, a meeting of the Fertilizer Supply and Distribution Management Committee held on Monday decided to reduce the subsidy.

A press release issued by the Ministry reads, “The subsidy provided to chemical fertilizer has now been reduced to 59.04 per cent against 70.82 per cent. It will be lowered to 50 per cent gradually.”

With this decision of the government, the price of the chemical fertilizer would be increased. Now, Urea would be sold at Rs 25 per kg, DAP at Rs 50 per kg and potash at Rs 40 per kg. Earlier, urea was sold at Rs 14 per kg, DAP at Rs 43 per kg and potash at Rs 31 per kg.

Prior to this, the government had been providing 80 per cent subsidy in urea, 60 per cent in DAP and 59 per cent in potash.

According to the Ministry, the decision to reduce the subsidy provided in chemical fertilizer was taken after the Finance Ministry asked for the same. Nepal needs 520,000 metric tonnes of chemical fertilizer every year, added Ministry.

A total of Rs 15 million budget was allocated in the fiscal year 2022/23 to provide subsidy to farmers in fertilizer. A total of 331,500 metric tonnes of chemical fertilizer has been purchased from Agriculture Inputs Company Limited and Salt Trading Corporation so far.

Of the purchased fertilizer, around 237,500 metric tonnes of fertilizer has already been imported while 94,000 metric tonnes of fertilizer is in the process of being imported.

According to the Ministry, there is likely to be a deficit of 90,000 metric tonnes of chemical fertilizer for paddy crop this year.