Global supply chain disruptions are being held responsible for the fuel and fertilizer crisis in India today affecting farmers during the kharif season. How bad is the crisis?

The crisis is far deeper than a temporary shortage of diesel, DAP [diammonium phosphate], or urea. What we are witnessing is the unravelling of a structural vulnerability that has been building up for decades under neoliberal policies. India is heavily dependent on imports not only for finished fertilizers like DAP and muriate of potash but also for liquefied natural gas [LNG], phosphatic rock, potash, and other raw materials. These imports are routed largely through West Asia and the Persian Gulf. The disruption around the Strait of Hormuz has sharply increased import prices and freight costs at precisely the moment when kharif season demand peaks in India.

Diesel prices affect irrigation, transport, harvesting, and food distribution. Rising LNG prices hit domestic fertilizer production. Shortages encourage hoarding and black marketing. All these disproportionately hurt small and marginal peasants. The [Narendra] Modi government’s dependence on volatile global markets, combined with the weakening of public distribution and procurement systems, has intensified the crisis. India’s food security is now directly vulnerable to imperialist wars and energy-market speculation.

West Asia is also a huge floriculture and horticulture market. How badly have those sectors and export chains been affected?

The impact on floriculture, fruits, vegetables, and other high-value agricultural exports has been severe because these sectors depend on rapid logistics, cold chains, and stable fuel prices. West Asia is a major destination for Indian grapes, bananas, mangoes, flowers, and processed horticultural products. Freight disruptions, higher aviation fuel costs, and shipping uncertainty have increased export costs sharply and created delays that are disastrous for perishable commodities.

Unlike large agri-export corporations, small growers engaged in contract farming or export-oriented cultivation lack the financial cushion to absorb these shocks. Many are already facing falling margins due to rising input costs, volatile export prices, and corporate control over supply chains. The present crisis reveals how export-oriented agriculture promoted under neoliberal reforms has made farmers dependent on unstable global markets. Instead of strengthening domestic food systems and farmer cooperatives, successive governments (especially the one under Modi) pushed agriculture towards integration with global commodity chains dominated by multinational traders and logistics corporations. When geopolitical conflict erupts, Indian farmers bear the burden while corporations protect their profits.

A man bundling grass in Patimeedapalem, Prakasam district, Andhra Pradesh, on February 6. Farmers have been bearing high operational costs for irrigation pumps, tractors, and transport. | Photo Credit: Kommuri Srinivas

Is it also a fact, as some argue, that while the present crisis was triggered by the blockade of the Strait of Hormuz, it was one in the making for several years?

Yes. Since the 1990s, India has steadily abandoned strategic self-reliance on fertilizers and energy. Liberalisation increased dependence on imported, finished fertilizers instead of expanding domestic capacity and public-sector investment. Simultaneously, India became more integrated into global energy and agri-input markets dominated by multinational corporations and geopolitical pressures.

The Modi government worsened this vulnerability by aligning foreign policy increasingly with US strategic interests, including curtailing cheaper imports from countries like Iran under American pressure. Farmers are now paying the price for this subordination. At the same time, the government weakened rural demand through cuts in welfare expenditure, stagnation in MSP [minimum support price] growth, and neglect of agricultural research and extension.

The fertilizer crisis is therefore not an isolated event. It reflects the long-term consequences of neoliberal policy, import dependence, privatisation, and the dismantling of public systems. The current war merely exposed contradictions that were already embedded within Indian agriculture.

What has been the government’s response to the shortage of fuel?

The government’s response has largely been reactive, and cosmetic. It is geared towards managing political perception rather than addressing structural problems. Instead of restoring stable, long-term energy arrangements or expanding public control over strategic sectors, the government has focussed on temporary excise reductions, public relations exercises, and appeals for “sacrifice” by ordinary citizens and farmers.

At the same time, the Centre has not substantially reduced the heavy tax burden on diesel used in agriculture. Farmers continue to bear high operational costs for irrigation pumps, tractors, and transport. There has also been no major universal diesel subsidy for agriculture despite widespread demands from farmers’ organisations.

More importantly, the government has failed to insulate India from global fuel volatility because it increasingly relies on market pricing mechanisms and private energy interests. The contradiction is striking: large corporations receive concessions and protection, while peasants are asked to reduce fertilizer use and accept lower consumption. The burden of the global crisis is thus being shifted downward onto working people instead of being socially redistributed through progressive state intervention.

The Finance Minister had declared a reduction in excise duty on petrol and diesel by Rs.10 per litre. Will that make much of a difference?

A reduction of Rs.10 per litre offers only limited and temporary relief because fuel prices remain structurally high due to taxation and global volatility. Diesel prices affect nearly every aspect of agriculture, such as irrigation, mechanisation, transport of inputs, and marketing of produce. A marginal cut cannot compensate for years of excessive indirect taxation imposed on fuel under the Modi government.

In reality, the government massively increased excise duties on petroleum products over the last decade in order to mobilise revenue without taxing corporate wealth. Farmers and workers effectively subsidised the fiscal system through regressive fuel taxes. Even after the announced reduction, Indian diesel prices remain burdensome for agricultural operations.

Moreover, rising fertilizer costs, freight charges, and electricity expenses have already eroded any limited benefit from the excise cut. What is required is a comprehensive agricultural energy policy, including subsidised diesel for farm operations, expanded public transport infrastructure, and reduced dependence on imported fossil fuels controlled by global energy cartels. The current measure is therefore more political optics than substantive relief.

A man winnowing paddy in Agartala, Tripura. The diesel and fertilizer crisis has disproportionately hurt small and marginal peasants. | Photo Credit: PTI

The Finance Minister said that three F’s had to be focussed upon: fuel, fertilizers, and forex. The first two directly affect farmers. Has enough been done on the areas affecting farmers so that farmer incomes are not jeopardised?

No, enough has clearly not been done. Farmers are facing a simultaneous squeeze from rising diesel prices, fertilizer shortages, stagnant MSP, and climate uncertainty. Reports from several States indicate that DAP and potash prices have sharply increased, while urea shortages have encouraged black marketing and rationing. In many places, farmers are standing in long queues or paying inflated prices in informal markets.

The government’s response has focussed mainly on preserving macroeconomic indicators and forex stability rather than protecting peasant livelihoods. Subsidies continue to disproportionately support corporations and importers, while actual farm incomes remain depressed. The contradiction is especially visible in the Nutrient-Based Subsidy [NBS] regime, where prices of phosphatic and potassic fertilizers are allowed to rise while urea remains controlled, worsening nutrient imbalance and damaging soil health.

Instead of guaranteeing affordable inputs and remunerative prices, the government has promoted a “natural farming” rhetoric without any scientific validation. This effectively shifts the burden of crisis management onto farmers themselves while corporate agri-input companies continue to profit.

What are the issues with the recently Cabinet-approved NBS policy and other farmer beneficiary schemes like the Farmer Registration and Unified Beneficiary Information System?

The central problem with the NBS policy is that it gradually shifts fertilizer pricing towards market determination while limiting the state’s subsidy commitment. Under the NBS, subsidies are fixed per nutrient, but actual retail prices fluctuate according to international markets. This exposes farmers to global price shocks. Potash and phosphatic fertilizers have therefore become increasingly expensive under the Modi government.

The policy also worsens nutrient imbalance because urea remains relatively cheaper while phosphatic and potassic fertilizers become unaffordable. This encourages excessive nitrogen use, harms soil health, and lowers long-term fertilizer productivity.

The Farmer Registration and Unified Beneficiary Information System raises another concern: the increasing centralisation and digitisation of agricultural governance without adequate safeguards. Such systems can become instruments for exclusion, surveillance, and conditional delivery of subsidies. Tenant farmers, sharecroppers, and landless cultivators often get excluded because they lack formal land titles. Rather than universalising entitlements, these systems narrow access through bureaucratic filtering. In effect, welfare becomes targeted and conditional while corporate agriculture receives freer and more flexible state support.

If farmers are generally opposed to it, why is the government insisting that the NBS is good?

The government insists on the NBS framework because it aligns with the broader neoliberal agenda of reducing the state’s direct responsibility towards agriculture while opening space for private corporations and market pricing. By fixing subsidies instead of controlling final prices, the government limits its fiscal burden and transfers risk onto farmers.

This policy is also favoured by international financial institutions, global agri-input corporations, and free-market economists who argue that fertilizer prices should reflect “market realities”. In practice, however, these so-called market realities are shaped by monopolistic global corporations and geopolitical conflicts beyond farmers’ control.

Farmers oppose the policy because they experience its real consequences: rising costs, nutrient imbalance, uncertainty, and declining profitability. Yet, the government continues to defend the NBS by presenting it as “efficient reform”. This language mirrors the same logic used earlier to justify farm laws, privatisation, and withdrawal of public support systems. The underlying objective is not farmer welfare but restructuring Indian agriculture in favour of corporate capital, import lobbies, and global agribusiness interests.

A farmer drying maize on the outskirts of Jagdalpur, Bastar, Chhattisgarh. Farmers have been trapped between rising input costs and inadequate output pricing. | Photo Credit: PTI

The Samyukt Kisan Morcha has rejected the Centre’s MSP rates for kharif crops. Is it a fact that many States, including BJP-ruled States, have estimated costs of production at rates higher than the declared MSP for kharif crops?

Yes. This has been a persistent criticism from farmers’ organisations and several State governments. The MSP announced by the Centre is often based on the narrower A2+FL cost formula [cost of inputs such as seeds, fertilizers, and labour plus the implied cost of family labour] rather than the comprehensive C2 cost [which includes the implied rent on land and interest on capital assets over and above A2+FL] recommended by the National Commission on Farmers. As a result, the declared MSP frequently falls below the actual cost of production estimated at the State level.

This gap has widened because input costs (diesel, fertilizers, pesticides, electricity, irrigation, and labour) have all increased sharply. Even BJP-ruled States have privately acknowledged that real cultivation costs are higher than the MSP declared by the Centre. Farmer organisations argue that this effectively transfers income away from cultivators towards traders, processors, and corporate food chains.

The refusal to implement a legal MSP based on C2+50 per cent reflects the Modi government’s larger orientation. It prioritises low food procurement costs, fiscal conservatism, and corporate profitability over peasant livelihoods. Consequently, farmers are trapped between rising input costs and inadequate output prices, deepening agrarian distress across the country. This is leading to the alarming rise in farm suicides on the one hand, and to distress sale of agricultural land and pauperisation of the peasantry on the other.

Has the PM-Kisan Samman Nidhi scheme ameliorated farmer lives?

During a crisis driven by rising input prices, PM-Kisan offers only extremely limited relief. There is no evidence that it has improved farmers’ livelihoods or protected them from the current crisis. The annual transfer of Rs.6,000 amounts to just Rs.500 per month. It is like a drop in the ocean. At a time when diesel prices, fertilizer costs, electricity charges, and other cultivation expenses have risen sharply, this amount is far too small to offset the increase in production costs. The scheme’s political visibility has been greater than its economic impact. The government has relied on a modest cash transfer as evidence of support for farmers instead of strengthening MSPs, expanding fertilizer subsidies, increasing public investment in agriculture, or supporting rural employment.

There are also serious exclusion issues with the scheme. Tenant farmers, sharecroppers, and cultivators without formal land titles are excluded because eligibility is tied to land records. And our land records are archaic and not accurately updated.

What is the viability of the Prime Minister’s call for zero-budget natural farming and a shift away from chemical fertilizers, ostensibly to save foreign exchange?

From a scientific perspective, the call for a large-scale shift to zero-budget natural farming is difficult to justify as a solution to India’s fertilizer crisis. While organic farming practices can play a useful role, there is no scientific consensus that they can replace chemical fertilizers on a national scale while maintaining current levels of food production. Most importantly, India’s current problem is not excessive fertilizer use across all nutrients but severe nutrient imbalance. Phosphorus and potassium application remains below recommended levels in most States. The primary reason for this is the extraordinary rise in the prices of phosphoric and potassium fertilizers in the last 15 years. A blanket reduction in fertilizer use could therefore worsen nutrient deficiencies, lower yields, and weaken food security.

The government’s budget allocations for natural and organic farming remain relatively modest. The National Mission on Natural Farming has supported pilot projects and demonstrations, but there is little evidence of large-scale success in sustaining yields and incomes across major food-producing regions. A more scientifically sound approach would be “integrated nutrient management”, which combines the use of organic inputs with balanced fertilizer use. We cannot treat natural farming as a substitute for modern agronomic science.