By IANS
New Delhi : The Fertilizer Advisory Forum Wednesday strongly opposed the direct subsidy of fertilisers to farmers and instead favoured the continuation of the existing practice of subsidy to the industry.
"The direct subsidy to farmers was opposed by the forum as it felt it was not in their interest," Minister for Chemicals, Fertilizers and Steel Ram Vilas Paswan told reporters here after the second meeting of the forum.
He said within the next three years there would be uniform price of fertilisers in the country and companies not meeting price requirement would face closure.
The issue of direct subsidy to farmers is likely to figure at the meeting of the Group of Ministers (GoM) next week that will also explore ways of sustainable use of fertilisers, besides deciding on prices and subsidies.
The forum, which was attended by state agriculture ministers, CEOs of leading fertiliser companies and senior government officials, in a resolution expressed deep concern over reports of slowdown in agricultural productivity though usage of nutrients that had increased substantially.
It felt that direct fertiliser subsidy would not bring down the government assistance from the current level of Rs.430 billion annually and instead other ways should be explored for the purpose.
"There is a feeling that the purpose of reducing the subsidy will not be served through its direct distribution to farmers," sources said.
The total subsidy during the current financial year (2007-08), including the last year's arrears of Rs.80.82 billion, is estimated at over Rs.510 billion.
Finance Minister P. Chidambaram, in his budget speech earlier this year, had said fertilisers should indeed be subsidised. "We must find an alternative method of delivering the subsidy directly to the farmers".
The fertiliser industry has agreed to work with the department of fertilisers to conduct a study and find a solution, Chidambaram had said, adding that the government intends to implement a pilot programme in at least one district in each state in 2007-08.
The Farmers Commission, chaired by eminent agriculture scientist M.S. Swaminathan, had also recommended direct subsidy to farmers.
However, the forum said such a move would lead to rise in the price of fertiliser and consumption may suffer.