The beginning of the new year is going to be worrying for the farmers. In fact, there is every expectation that the price of DAP will increase in the new year. Here, the 50 kg bag of DAP which the farmers were getting for Rs 1350, will now be available for Rs 200 more.
The Central Government has been giving special subsidy at the rate of Rs 3500 per tonne to provide DAP to the farmers at a cheaper price. Now his time is ending on 31st December. At the same time, the effect of increase of up to 70 percent in the prices of phosphoric acid and ammonia used in making DAP can be seen on the prices of fertilizers.
Subsidies are given to companies
Nutrient-based subsidy scheme of the Central Government for phosphate and potash containing i.e. P&K fertilizers is going on since April 2010. This subsidy is given to companies manufacturing fertilizers. The P&K sector is deregulated and under NBS companies can produce and import fertilizers as per the market.
If the time limit is not extended…
Apart from this, a special grant is provided to the farmers to provide DAP at a lower price, if the time limit of which is not extended then it is almost certain that the prices of DAP will increase from January 1. About 90 percent of the total demand of DAP in the country is met by imports.
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The industry will be burdened if subsidies remain in place
If the special subsidy is continued in the coming days, the industrial sector will have to bear its burden. The value of rupee has been decreasing against the dollar for some time. Currently the price of DAP in the global market is $630 per tonne.
This is the reason why due to weakening of rupee the import cost is increasing by about Rs 1200 per tonne. In such a situation, if the subsidy is also stopped then the cost will increase by about Rs 4700 per ton. Due to which each bag will become costlier by about Rs 200.
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