One Time Special Package On Dap Fertilizer

ONE TIME SPECIAL PACKAGE ON DAP FERTILIZER

• On January 1, 2025, the Union Cabinet, under the leadership of Prime Minister Narendra Modi, approved the extension of the One-Time Special Package on Diammonium Phosphate (DAP)
• This extension is for the period from January 1, 2025, onwards, until further orders, to ensure sustainable availability of DAP at affordable prices for farmers.
• The special package will continue the subsidy of ₹3,500 per metric ton (MT) of DAP over and above the existing Nutrient Based Subsidy (NBS).
• The estimated budgetary requirement for this extended support is approximately ₹3,850 crore.

ABOUT DAP

Di-Ammonium Phosphate (DAP) is a widely used chemical compound primarily as a fertilizer in agriculture. It is an inorganic salt with the chemical formula (NH₄)₂HPO₄. DAP is one of the most popular phosphorus-based fertilizers because it contains two essential nutrients for plant growth: nitrogen (N) and phosphorus (P).

• Nitrogen (N): 18% of the fertilizer content is nitrogen, which is crucial for the growth of leaves and overall plant health.
• Phosphorus (P): 46% of the fertilizer content is phosphorus, which promotes root development, flowering, and fruiting.

KEY CHARACTERISTICS OF DAP

• Appearance: DAP is typically found as a white to off-white crystalline powder or granules.
• Solubility: It is highly soluble in water, which allows plants to absorb the nutrients quickly.
• pH: When dissolved in water, DAP tends to increase the pH of the soil, making it slightly alkaline.

USES

• Fertilizer: DAP is most commonly used in agriculture as a source of phosphorus and nitrogen. It’s especially effective for crops that need a high amount of phosphorus, such as corn, wheat, rice, and soybeans.
• Soil Improvement: It is also used to improve the quality of soil by enhancing its nutrient profile and promoting healthy root systems.
• Hydrogenation and Acid Reactions: DAP has some industrial applications, such as in water treatment and as a flame retardant in certain materials.

ADVANTAGES & DISADVANTAGES

Advantages:

• High Nutrient Content: The high percentage of nitrogen and phosphorus in DAP means fewer applications are needed compared to other fertilizers.
• Fast-Acting: Due to its high solubility, DAP provides quick nutrient availability for plants.

Disadvantages:

• Soil Alkalinity: Prolonged use can make the soil slightly more alkaline, which may not be ideal for certain crops that prefer acidic soil.
• Cost: As with many high-nutrient fertilizers, DAP can be expensive for farmers in some regions.

KEY POINTS

Objective:

The primary goal of this extension is to ensure the availability of DAP at affordable prices to farmers, particularly given the volatility in global markets and geopolitical constraints that have impacted fertilizer prices worldwide.

• Package Extension:
  • The subsidy of ₹3,500 per MT for DAP will be extended for an indefinite period starting from January 1, 2025.
  • The special package aims to provide financial relief to farmers, keeping the prices of DAP fertilizer at reasonable levels.

• Financial Implications:
  • The tentative financial implication for this extension is approximately ₹3,850 crore.
  • When combined with the package approved earlier in July 2024, the total amount spent on the special package for DAP from April 2024 to January 2025 will exceed ₹6,475 crore.
• Background of DAP Subsidy:
  • DAP is a key phosphatic fertilizer that is used extensively by farmers for crops like wheat, paddy, and groundnut.
  • Since April 2010, the subsidy on phosphatic and potassic fertilizers (P&K fertilizers), including DAP, has been governed under the Nutrient Based Subsidy (NBS) Scheme.
    • The Nutrient Based Subsidy (NBS) scheme is a government program that provides a fixed subsidy on Phosphatic and Potassic (P&K) fertilizers.
    • The scheme was implemented on April 1, 2010.
    • The subsidy is based on the nutrient content of the fertilizer and is decided annually or biennially.
  • In 2024, despite geopolitical tensions and global price volatility, the Indian government kept the price of DAP unchanged, offering farmers substantial relief by maintaining the price at affordable levels during both the Kharif and Rabi
• Impact on Farmers:
  • The extension of this package ensures farmers continue to receive DAP at subsidized prices, which is crucial for their agricultural productivity.
  • This move also emphasizes the government’s commitment to farmers’ welfare and to keeping the cost of essential agricultural inputs low, even amidst challenging external factors.

Benefits of the Extension:

• Affordability: The continued subsidy ensures that DAP is available to farmers at reasonable and affordable prices, which is vital for maintaining their crop yields and productivity.
• Sustainability: The extension guarantees the sustainable supply of DAP fertilizer over an extended period, ensuring that farmers can rely on consistent input prices and supply.
• Farmer Welfare: The primary focus is on ensuring that farmers are not burdened by high fertilizer costs, which could otherwise hurt their financial stability and crop production.

IMPLEMENTATION STRATEGY

• The special package will continue to offer a subsidy of ₹3,500 per MT of DAP over and above the existing NBS subsidy for the period from January 1, 2025, until further instructions.
• The Department of Fertilizers will oversee the smooth distribution and availability of DAP under this package to ensure that farmers across the country can access it without disruptions.

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