Modi Govt Protects Farmers From Skyrocketing Fertilisers Price Amid Russia-Ukraine War

New Delhi, India: The ongoing Russia-Ukraine war has led to a sharp increase in global fertilizer prices, significantly affecting India's supply chain. Russia, a major exporter of nitrogen, potassic, and phosphorus fertilizers, has faced disruptions, causing a rise in costs for countries heavily reliant on imports like India.

Modi Government’s Balancing Act

In response to the price surge, Prime Minister Narendra Modi -led government has taken steps to shield Indian farmers from the financial impact. The government’s efforts include substantial subsidies to mitigate the effects of global price hikes.

Shielding Farmers: Subsidy Numbers

₹2.25 Lakh Crore (2022-23): The Indian government allocated this amount in fertilizer subsidies to protect farmers from soaring prices. This record-high spending ensured that farmers were insulated from international cost increases.

₹1.89 Lakh Crore (2023-24 Revised Estimate): Although there was a slight reduction in the planned subsidy, the revised estimate still reflects a significant commitment to farmer relief.

Fiscal Impact and Trade-Offs

While the subsidies have provided crucial relief, they have also led to financial trade-offs. Funds allocated for fertilizer subsidies have diverted resources from other critical areas:

Job Creation & Infrastructure: The money used for subsidies could have supported job creation and infrastructure development, but immediate relief for farmers has taken precedence.

Social Welfare Programmes: Funding for programs aimed at underprivileged communities has been slower due to the reallocation of resources to support the agricultural sector.

Diplomacy and Supply Chain Resilience

In addition to subsidies, the Modi government has worked to maintain a steady supply of Russian fertilizers through strengthened diplomatic relations. Increased imports from Russia have helped alleviate some of the supply chain disruptions caused by the geopolitical conflict.

The Long-Term Strategy

The government is not only focused on short-term relief but is also planning for long-term solutions, including:

Reducing Import Dependence: Increasing domestic fertilizer production to lessen reliance on foreign supplies.

Sustainable Agriculture: Promoting practices that reduce the overuse of fertilizers.

Infrastructure Investment: Enhancing supply chain resilience through improved infrastructure.