Cabinet Committee on Economic Affairs has cleared a new fertilizer pricing policy that will make some varieties cheaper and help farmers. The proposed policy is expected to encourage farmers to use complex fertilizers that contain more than one nutrient instead of ones which have only one nutrient.

Under the existing pricing regime, the price of nutrients in complex fertilizers was higher than the price of same nutrient in straight fertilizers like urea or DAP. This led to higher usage of straight fertilizers vis a vis complex fertilizers.

CCEA also decided to provide a uniform freight subsidy for all fertilizers. This will help farmers across India get fertilizers in the crucial sowing period. Urea has so far been eligible for freight subsidies under the subsidy scheme but DAP and MoP was not. The new scheme is based on payment of actual freight, and will ensure easier availability of fertilizer in all parts of the country. At present, fertilizer firms get a fixed sum as freight irrespective of distance from the production centre to the sale point.