CACP recommends Centre to bring urea under NBS regime

Tags: National National News

The Commission for Agricultural Costs and Prices (CACP) has recently recommended the Centre to bring urea under the nutrient-based subsidy (NBS) regime to address the problem of imbalanced use of nutrients.

An overview of the news

• The purpose of this recommendation is to address the problem of nutrient imbalance in agriculture.

• Nutrient-based subsidy (NBS) scheme was introduced in 2010 for non-urea fertilisers. 

• Presently urea has been kept out of NBS scheme which has led to inequitable use and deterioration in soil health.

• The CACP believes that this would help address the problem of imbalanced use of nutrients, which has adversely affected soil health and crop productivity. 

• According to CACP fertiliser subsidy has been rising over the years, while fertiliser response and efficiency have been declining.

• In December 2022, the government informed Parliament that there was no proposal to shift urea to NBS.

Imbalanced use of fertilisers

• Urea, containing nitrogen, is the only fertiliser whose price is regulated directly by the government. 

• Other fertilisers like DAP and NPK, containing phosphorus and potassium, have prices determined by market forces.

• The government provides a fixed subsidy per tonne of fertilisers based on their nutrient content.

• Due to the price difference, urea is significantly cheaper compared to other fertilisers, incentivizing farmers to use more urea than necessary.

• Excessive use of urea and lower application of other essential nutrients create an imbalance in soil fertility, leading to soil degradation.

Commission for Agricultural Costs and Prices (CACP)

• It was formed in January 1965.

• It is an expert body that recommends Minimum Support Price (MSP) to the government after taking into account the cost of production, trends in domestic and international prices.

• It is a statutory body of the Ministry of Farmers Welfare.

• It recommends MSP for 22 Kharif and Rabi crops.

• Its recommendations are not binding on the government.