PM Promotion of Alternate Nutrients for Agriculture Management (PRANAM) Yojana

In News

• The Union government intends to launch a scheme — named PM PRANAM — to reduce the use of chemical fertilizers by incentivising states.

Key Highlights

• Aim: 
  • To bring down the subsidy burden on chemical fertilisers, which is estimated to reach Rs 2.25 lakh crore in 2022-23 — 39 percent higher than last year’s figure of Rs 1.62 lakh crore.
• Vision: 
  • The move is in line with the government’s focus on promoting a balanced use of fertilisers or alternative fertilisers in the last few years.
• Budget: 
  • The scheme will have no separate budget and will be financed through the savings of existing fertiliser subsidies under schemes run by the Department of Fertilisers.
  • 50 percent of subsidy savings will be passed on as a grant to the state that saves the money.
  • 70 percent of the grant provided under the scheme can be used for:
    • Asset creation related to technological adoption of alternate fertilisers and 
    • Alternate fertiliser production units at village, block and district levels. 
  • The remaining 30 percent grant money can be used for:
    • Rewarding and encouraging farmers, panchayats, farmer producer organisations and self-help groups that are involved in the reduction of fertiliser use and awareness generation.

Need for the Scheme 

• Higher Spending Required: In the current financial year (2022-23), the government has allocated Rs 1.05 lakh crore. The fertiliser subsidy figure could cross Rs 2.25 lakh crore during this year.
• Increased Demand: The total requirement of four fertilisers — Urea, DAP (Di-ammonium Phosphate), MOP (Muriate of potash), NPKS (Nitrogen, Phosphorus and Potassium) — in the country increased by 21 percent to 640.27 lakh metric tonnes (LMT) in 2021-22 from 528.86 lakh metric tonnes in 2017-18.

Image Courtesy: IE

Challenges in Fertilizer Sector

• Less Production: 
  • The pandemic has impacted fertilizer production, import and transportation across the world.
• Imports Reduction: 
  • Major fertiliser exporters such as China have gradually reduced their exports in view of a dip in production.
  • This has impacted countries such as India, which sources 40–45% of its phosphatic imports from China.
• Supply Mismanagement: 
  • There has been a surge in demand in regions like Europe, America, Brazil and Southeast Asia.
  • While the demand has increased, the supply side has faced constraints.
  • India is facing a tight supply position in fertilisers, especially of phosphatic and potassic nutrients.
• Rising Raw material Prices: 
  • There has been a steady increase in prices of raw material as well as logistics and freight costs.            
  • The disruption in the logistics chain during COVID has caused the average freight rates for ships to jump up to four times.
  • Besides, prices of fertilisers such as DAP and urea, and raw materials such as ammonia and phosphatic acid, have risen up to 250–300%.
• No Denial Policy:
  • At present, the Centre is following a “no denial” policy. Anybody, non-farmers included, can purchase any quantity of fertilisers through the PoS machines. 
  • While there is a limit of 100 bags that an individual can purchase at one time, it does not stop anyone from buying any number of times.
  • It obviously allows for bulk buying by unintended beneficiaries, who are not genuine or deserving farmers. 

Government Initiative- Bridging the gap of Leakages

• To plug leakages in fertiliser subsidy, a direct benefit transfer system is introduced in fertilisers with effect from October 2016. 
  • Under this system, 100 percent subsidy on various fertiliser grades is released to the fertiliser companies on the basis of actual sales made by the retailers to the beneficiaries. 
• Incorporated new nutrients like Nano urea and bio-stimulants in the Fertilizer Control Order-1985 (FCO). 
• Soil Health Card and neem-coated urea are other initiatives taken by the Government.

ICAR Recommendations

• Soil test based balanced and integrated nutrient management through conjunctive use of both inorganic and organic sources of plant nutrients. 
• Use of slow-releasing N-fertilizers (Neem Coated Urea) and nitrification inhibitors.
• Growing leguminous crops.
• Use of resource conservation technologies (RCTs).

Way Ahead

• The time has come to seriously consider paying farmers a flat per-acre cash subsidy that they can use to purchase any fertiliser. 
• The government needs to encourage the balanced use of fertilizers in conjunction with biofertilizers and organic fertilizers.

Source: IE