The Commission for Agricultural Costs and Prices (CACP) has issued a strong warning against any attempts to remove fertiliser subsidies or shift to direct benefit transfer (DBT), stating that such changes could lead to reduced fertiliser use and lower agricultural production. According to reports from Business Standard, the Commission released its latest price policy report for the 2026-27 kharif season on Wednesday, emphasizing the critical importance of maintaining current subsidy structures for agricultural sustainability. The Commission has specifically warned that any attempt to remove fertiliser subsidies or shift to direct benefit transfer (DBT) could lead to reduced fertiliser use, resulting in lower agricultural production.
India's fertiliser subsidy is projected to rise to more than ₹2.17 trillion in FY26 against the Budget Estimate of around ₹1.67 trillion due to excessive consumption of urea, di-ammonium phosphate (DAP), and other fertilisers. As reported by Business Standard, in FY27, the government expects fertiliser subsidy to remain at least 20 per cent higher than the Budget Estimate of ₹1.86 trillion because of a spike in global prices of finished fertilisers such as urea and DAP, as well as raw materials used in their production due to the West Asia crisis.
Rather than implementing subsidy removal or DBT shifts, the CACP has suggested that digital platforms such as AgriStack should be leveraged to contain imbalanced use of soil nutrients and reduce the subsidy burden without affecting agricultural production. According to the Commission's recommendations, this approach would maintain agricultural output while addressing the financial pressures of the current subsidy system. The Commission emphasizes that digital platforms such as AgriStack should be leveraged to contain imbalanced use of soil nutrients and reduce the subsidy burden without affecting agricultural production.
The CACP has called for a revisiting of the commonly accepted ideal ratio of nitrogen (N), phosphorus (P), and potassium (K) at the all-India level of 4:2:1 in view of changing cropping patterns, agro-climatic factors, soil characteristics, and irrigation coverage. As reported by Business Standard, the Commission suggests that such norms should be developed at a more disaggregated level and emphasizes the need for special efforts to promote use of micro and secondary nutrients and strategies to improve soil organic carbon. The Commission recommends that such norms should be developed at a more disaggregated level and emphasizes the need for special efforts to promote use of micro and secondary nutrients and strategies to improve soil organic carbon.
The Commission has also suggested a review of the open-ended procurement policy for paddy, citing that persistently excess rice stocks due to open-ended procurement, high bonus on paddy by some states — particularly surplus states — and stagnating exports during the past three to four years have put huge pressure on storage and warehousing capacity and created significant financial stress on the public exchequer. According to Business Standard, the CACP recommends imposing limits on procurement, especially in surplus states that offer bonus over and above the MSP and have high market fee and other charges. The Commission states that therefore, a limit needs to be imposed on procurement, especially in surplus states that offer bonus over and above the MSP and have high market fee and other charges.
