- [Act 1] Fertilizers: Botany /Chemistry angle (NCERT)
- [Act 2] Subsidies: Where is it counted in budget?
- [Act 3] What is Nutrient Based subsidy (NBS)?
- [Act 4] Budget-2014 on Agriculture
Economic Survey Chapter 8: Agriculture and Food Management. SIX subparts:
- Fertilizer subsidy & schemes, Budget-2014 announcement
- Minimum support pricing, Sugar pricing, Procurement reforms
- National food security act (NFSA)
- WTO Bali Summit
- APMC reforms, National market for agriculture, NSEL crisis
- El Nino and its impact on Indian monsoon
- Source: NCERT Biology Class11, Ch.12
Essential elements classified into two parts:
|Macro nutrients||Micro Nutrients|
||Iron, manganese, copper, molybdenum, zinc, boron, chlorine and nickel.|
|present in large amount in the tissue||Needed in very small amount|
|Nutrient||Symptoms visible in||Why?|
if soil is deficient in any nutrient, we’ve to artificially fill it up with fertilizer or manure.
|Inorganic salt||Natural substance from decomposition of organic waste.|
|doesn’t provide humus to soil||yes, provides|
|rich in nitrogen, phosphorous, potassium (depending on composition)||less rich|
|prepared in factories||prepared in fields|
|Phosphorous||2||80-85% via import|
|Potash||1||100% via import|
*Ideal ratio for Indian soil
Budget type: revenue vs. capital
|revenue part||capital part|
||subsidy counted here|
Budget type: plan vs Non-plan
|Total Receipts||Total Expenditure|
|revenuereceipts||capitalreceipts||plan Expenditure||non plan Expenditure|
|subsidies counter here|
Ranking of Subsidies
|Ranking 2013||Food > Petroleum > fertilizer|
|Ranking 2014||Food > Fertilizer > Petroleum|
Amount of Subsidies (Cr.)
|Food||92000||115000 (same as Chindu interim)|
|Fertilizer||67971||72970(increased over Chindu interim)|
|Petroleum*||85480||63427(same as Chindu interim)|
* given to state-run oil companies for selling fuel, LPG and kerosene below cost price.
Fertilizer subsidy internal ranking
|Jaitley budget 2014||Rs. Crore|
Ranking: Domestic urea >> (P,K) >> Imported Urea
- Launched in 2010. Before that, we had “product based subsidy”.
- Under NBS, govt. gives subsidy based on weight of the different Macro/micro nutrient in the fertilizer.
- In this way, fertilizers companies can make new product mixes with micro-nutrients, according to soil requirement in each region.
- And farmers can afford to buy these tailor-made fertilizers because government gives subsidy to keep them cheap.
- Urea not covered in this scheme.
- Delay in NBS subsidy payments.
- Therefore Fertilizer companies focus more on Urea more than other fertilizers.
- Result: shortage of (Cheap) non-urea fertilizers.
- So, farmers also overuse Urea. ideal ratio of NPK disrupted
|Nutrient Ratio in soil||Ideal||real|
- Result? Ground water pollution, Soil fertility declined, especially in Punjab and Haryana
- Additional nitrogen doesn’t improve crop yield beyond a point.
- Farmer doesn’t move to specialized fruits, vegetable, horticulture cropping- because they require special non-Urea fertilizers, which are not easily available at cheap rates.
- So, one hand, tax payers pay for subsidies (and MSP), yet consumers still suffer from food inflation due to low production.
- Shortage of coal and natural gas has decreased Urea production. Government has to import from abroad.
|UP, Bihar||urea smuggled to Bangladesh and Nepal|
|Maharashtra, Gujarat and Haryana||Urea smuggled to chemical industries- especially in dyeing, inks, coatings, plastics and paints.|
- Result: nearly 3 million tonnes of Urea, doesn’t reach farmers.
- And since Government gives Rs.5360 subsidy PER tonne to urea companies so imagine the loss of public money!
- Thus fertilizer subsidy hurts everyone: farmers, firms, taxpayers, and consumers
Economic Survey reforms:
- Add Urea in the NBS regime.
- Pay fertilizer subsidy directly to farmer (i.e. by bank transfer) as per Nilekani Task force recommendations.
- Then, fertilizer companies & their middlemen will have no benefit in smuggling.
- Encourage Indian companies to setup joint ventures with foreign fertilizer companies.
- Enter in long term fertilizer supply agreement with foreign countries.
- Mission mode project (100 crores)
- For all farm lands
- 100 Mobile Soil Testing Laboratories to be Set up
- A computerized system will facilitate local agriculture science centres to keep details of ‘soil test’ results of their area.
- The system will give allot a unique number to ‘Soil Health Card’ of each soil sample.
- The card will carry crop-wise recommendations of nutrients and fertilizers
- This way, any change in ownership of the farm lands will not create any problem in updating the information
Gujarat’s soil health card projects
- 2006: Gujarat becomes the first state to launch Soil health card scheme.
- First the soil properties tested-mineral composition, water retaining capacity etc.
- Then farmer gets a soil health cards containing information on what kind of pesticides, fertilisers, seeds and how much water should be used, to get MAXIMUM productivity from his land.
|National market||Food security|
|Bhoomi Heen Kisan||
|National Adaptation Fund100 cr||
|Price Stabilization Fund.500 cr||
|Warehouse Infrastructure Fund (5k cr.)||
|Long Term Rural Credit Fund (5k)||NABARD To provide refinance to cooperative and RRBs|
|Short Term Cooperative Rural Credit (50k cr.)||
|Teaching||Agro universities @Andhra + Rajasthan|
|Horticulture||Universities @Telangana + Haryana|
|Soil testing labs||100 mobile labs across country|
|blue revolution in inland fisheries||50 crore|
|Indigenous cattle breed||50 crore|
- This appendix contains the topics, scheme discussed in Economic Survey.
- Beyond that, remaining (truckload of schemes), FDI conditions already under the [Food processing] Article series. click me.
|World average||2238 kg/year|
- This is mainly due to low genetic potential of indigenous cattle breed, shortage of fodder and prevalence of diseases.
- There 37 recognised indigenous cattle breed in India- Gir, rathi, Sahiwal, Kasaragod Dwarf, Kankrej etc.
- 2013: Animal Husbandry Department launched a project to conserve indigenous breeds.
- Indigenous cattle breeds are better than exotic cattle breed due to following reasons:
- resistant to climate change and diseases
- need less fodder
- suitable for drought work
- Although they give less milk but its quality better than that of hybrid or cross breed cattle.
2013: launched Seed rolling plan to identify good domestic seed varieties & improve their production, preservation. (expires in 2016-17)
Do not confuse between “ACT” and “MISSION”.
|National food security||who?|
|Act(for giving cheap grains to junta)||Dept. of Food and public distribution under consumer affairs ministry|
|mission(for increasing agro production)||Ministry of agriculture (discussed below)|
Food security mission has FIVE components:
- Millets (coarse cereals)
- Commercial crops- cotton, sugarcane and Jute
+cotton development program added recently
|Targets @end of 12th FYP||Million tonnes|
Related: Rashtriya Krishi Vikas Yojana (RKVY)
|Agriculture growth rateincluding fishing and forestry||4.7%|
|contribution to GDP||
|Contribution to employment||Agro > Services > industries (Ref. Survey box 1.2)|
|Contribution to total inputs in economy||Industries > Services > Agro (Ref. Survey box 1.3)|
|Assertion||in recent years, the real farm wages have increased|
|Reason||there has been a shift from farm to non-farm employment|
|Correct answer||both right and R explains A, because Economic Survey says so|
|75%||Of annual rainfall comes from south-west monsoon (from June to September). During El Nino, it’ll decline to 70%|
|60%||Of total foodcrop & oilseed grown in kharif season|
|35%||Of areable area is being irrigated|
|45%||of net cropped area, is irrigated.|