New Delhi: The government policy of providing cheap urea to farmers reduces the cost of cultivation, but it is also placing major pressure on soil, groundwater and the government exchequer. A new Climate Trends study, “The Economics of Cultivation”, claims that the real social and environmental cost of subsidies given on chemical fertilisers could be 36 to 182 percent higher than the direct economic benefits received by farmers.
The study analysed examples of wheat and paddy cultivation in eight states. In all study cases related to wheat cultivation, after adding environmental damage and government spending, the total benefit to society was found to be lower than the direct economic benefit to farmers. In two of the five cases, the total social benefit turned negative.
Nutrient imbalance from cheap urea: According to the report, because urea prices have long been controlled and kept relatively low, farmers are encouraged to use more nitrogen-based fertiliser. This disturbs the nutrient balance in the soil. The study said that in 1970, one kilogram of fertiliser produced 13.4 kilograms of grain, while by 2015 this had fallen to 2.7 kilograms.
Impact on groundwater and the environment: The study mentioned that in some groundwater samples in Punjab, Haryana, Rajasthan, Uttar Pradesh and Tamil Nadu, nitrate levels were found to be above the prescribed drinking water limit. Excessive use of fertilisers affects soil quality and also increases the risk of greenhouse gas emissions and water pollution.
Recommendation for subsidy reform: Climate Trends has recommended gradually restructuring the urea subsidy on a nutrient basis, encouraging farmers to use balanced fertilisers and promoting organic alternatives. Instead of abruptly ending subsidies, the report said a phased transition is needed, along with farmer training, availability of alternative fertilisers and market support.
The study concludes that while maintaining farmers’ economic security, it is necessary to promote balanced use of fertilisers so that, along with agricultural productivity, the health of soil and water resources can also be protected.
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