Question Bank - Agriculture Officer

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In India, subsidy for the main nitrogenous fertilizer urea, is regulated through a policy wherein it is provided to farmers at a statutory maximum retail price of _______ per tonne (5% extra for the neem coating).

A.
Rs. 4730
B.
Rs. 3950
C.
Rs. 2480
D.
Rs. 5360

Solution:

The correct answer is Rs. 5360. Subsidy for the main nitrogenous fertilizer product, urea is regulated through a policy wherein it is provided to farmers at a statutory maximum retail price (MRP) of Rs 5,360 per tonne (5% extra for the neem coating). The difference between the government fixed price of Urea and the delivered cost of companies is given as a subsidy. The retail price for urea in India is the lowest anywhere in the world. In India, fertilizer subsidies alone account for more than Rs 70,000 crore annually. Additional InformationFertilizer subsidy forms more than 0. 8 % of the GDP in India as per the Economic Survey 2018-19. Urea is the most important nitrogenous fertiliser in the country because of its high N content (46%N). It is used in the crops. It is also used as a cattle feed supplement to replace a part of protein requirements. Urea. Fertilizers provide three primary nutrients: Nitrogen (N), Phosphorus (P) and Potassium (K). Urea is domestically produced by 30 large size plants in the country. The MRP of neem-coated urea, for instance, is fixed by the government at Rs 5,922. 22 per tonne, whereas its average cost-plus price payable to domestic manufacturers and importers comes to around Rs 17,000 and Rs 23,000 per tonne, respectively. (As of July 2021)The Centre, however, pays a flat per-tonne subsidy on these nutrients to ensure they are priced at œreasonable levels. The per-tonne subsidy is currently Rs 10,231 for di-ammonium phosphate (DAP), Rs 6,070 for muriate of potash (MOP) and Rs 8,380 for the popular 10:26:26 complex fertiliser, with their corresponding average MRPs at Rs 24,000, Rs 17,500 and Rs 23,500 per tonne, respectively.

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