Union Cabinet clears extra fertiliser subsidy, revamped crop-insurance scheme
Prime Minister Narendra Modi on Wednesday said his government’s first decisions in the new year were dedicated to farmers soon after the Union Cabinet cleared a revamped, flagship crop-insurance scheme to mitigate growing climate risks and additional subsidy for fertilisers as global prices of crop nutrients edged up in recent months due to geopolitical uncertainties.
The Union Cabinet, chaired by Modi, approved a restructured Pradhan Mantri Fasal Bima Yojana and Restructured Weather Based Crop Insurance Scheme till 2025-26 with an overall outlay of ₹69,515.71 crore. Alongside, it also signed off on a proposal to top up the subsidy allocation for di-ammonium phosphate (DAP) to cushion prices for cultivators.
“The first Cabinet of 2025 is dedicated to enhancing prosperity for our farmers. I am glad that key decisions have been taken in this regard,” Modi said in a post on social-media platform X.
“We have approved an increase in the allocation for crop insurance scheme. This will provide more security to farmers’ crops and will also mitigate their concerns about any damage.”
The council of top ministers also approved a proposal of the department of fertilisers for a one-time special package on DAP over and above the so-called nutrient-based subsidy (NBS) regime, at ₹3,500 per tonne. This grant will require extra allocation of ₹3,850 crore, an official statement said.
Under the NBS policy, the government offers, on an annual basis, a fixed rate of subsidy on a per kg basis for crop nutrients containing nitrogen (N), phosphate (P), potash (K) and sulphur (S) to shield farmers from high market prices.
Since the Russian invasion of Ukraine, global fertiliser prices, especially of inorganic varieties, have remained volatile, although they have come down from their peak of 2021.
“This calls for policies to help smallholder farmers to build strong support systems to be more resilient and better able to cope with the adverse effects of rising inorganic fertiliser prices during polycrises and related shocks,” the World Bank had said in its mid-year review last year.