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Attaining ‘Atmanirbharta’ in fertilizer sector: Economics...
By KM Jayahari · 2026-05-31 · via Business News Today: Latest Business News, Finance News

The Prime Minister’s recent call to action to farmers for reducing chemical fertilisers usage is certainly a concerning sign, however, this is a situation as apt as any to also consider accelerated efforts for the long-due shift to natural farming (NF) - thereby attaining ‘atmanirbharata’ in Indian fertiliser sector.

A recent estimation shows that 93 million agriculture households are agriculture- dependent for their livelihoods. With present fertiliser to grain response at 1:2.7 in irrigated areas, a significant portion of these households are may be affected by this crisis through yield compromise and crop loss. As a significant percent of these households are small and marginal farmers, this shortage may, result in loss of livelihoods, food insecurity, and inflation.

As an inflation control strategy, sub-national governments would be hesitant to make severe cuts in supply to certain crop systems like wheat and rice. This implies that the fertiliser shortage may be more acute in some regions. The small and marginal farmers in hotspots will be left with two options – either shift to NF or find alternate measures, which are outside of farming. Government and civil society must quickly step up to the occasion and respond.

Designing a fertiliser supply management pathway

There is an existing successful method of supporting the farmers through Community Resource Persons (CRPs) and Bio-Resource Centers (BRCs). Along with the sub-national governments’ knowledge of present fertiliser demand pattern and regional priorities , complemented by a wide network of grassroots organisations there can be prompt identification of districts likely to be affected. Finally, keeping the financial outlay of this effort within the allocations to the agriculture sector is another key component of the pathway.

India’s large body of knowledge with non-state actors with regard to NF practices can also be leveraged. A sizeable number of Indian farmers adopt various forms of chemical-free farming, and agencies have developed site specific versions these techniques.

However, this knowledge is highly fragmented across regions. It is important to establish a national knowledge management system that consolidates and validates this.

Financing the action plan

The primary hurdle with executing such a programme is its huge financial resource requirement, especially as the present Indian situation is driven by both fiscal and energy crises. Shifting 40% of these households in six years with training and other infrastructure support for four seasons will cost approximately ₹10,848 crore, with an average annual expenditure of around ₹1,808 crore per annum. This annual figure is about 75 per cent of the present financial outlay of National Mission on Natural Farming (NMNF), which goes on to suggest that with some adjustments, this resource can be utilised for the issue at hand.

This figure needs to be considered in comparison with the ₹ 1.91 lakh crores spent annually on fertiliser subsidy. Achievement of 50 per cent reduction in chemical fertiliser usage in 40 per cent of the gross sown area would mean a value same as 20 per cent of the chemical fertiliser incentives, i.e. ₹38,200 crores; even a 50 per cent success of this target will amount to gains of upto ₹19,100 crore a year.

The economics of this idea may, of course, be further analysed, but at its core it simply suggests that challenging situations often call for out-of-the-box, albeit practical measures that may, after all, bear the most fruitful results. The present situation facing India may be referred to as an ‘all hands on deck’ kind; and keeping the ship afloat requires prompt thinking and action by the government, institutions, and experts.

The author is Country Director, Food and Land Use Coalition India

Published on May 31, 2026