The Looming Crisis in Indian Agriculture: Soil, Subsidies, and a Path to Sustainability
India’s agricultural sector, the livelihood for nearly half the nation’s workforce, is facing a critical juncture. While contributing approximately 15% to the national income, the sector is burdened by a vicious cycle of low profitability, declining soil health, and a crippling dependence on fertilizer subsidies. The situation demands urgent attention and a fundamental shift in policy.
The Fertilizer Trap: A Staggering Subsidy Bill
The current system is unsustainable. In 2025-26, India’s fertilizer subsidy is projected to reach a staggering ₹1.9 trillion – exceeding the entire budget allocated to agriculture (including livestock and fisheries) at ₹1.5 trillion. A significant portion, ₹1.3 trillion, is earmarked for urea subsidies alone. This leaves limited resources for crucial areas like agricultural research, irrigation support, and infrastructure development.
This reliance on subsidies stems from India’s heavy dependence on imports: approximately 75% for urea, 90% for DAP, and 100% for potash. Global price fluctuations directly impact the subsidy bill, as the government attempts to shield farmers from rising costs. In 2022-23, the fertilizer subsidy soared to over ₹2.5 trillion due to global disruptions following the Russia-Ukraine conflict.
The Hidden Costs of Cheap Urea
The artificially low price of urea, largely subsidized by the government, encourages overuse. Farmers often apply significantly more urea than recommended, neglecting other essential nutrients. This imbalanced fertilization reduces soil fertility and has detrimental environmental consequences. Excess urea isn’t absorbed by plants and is released into the atmosphere as nitrous oxide, a potent greenhouse gas with a global warming potential 272 times that of CO2.
According to the International Food Policy Research Institute (IFPRI), a substantial portion of taxpayer money is “going up in the air,” wasted on inefficient fertilizer application. Plants absorb only around 40% of the applied urea, while the rest damages the environment and leaches into groundwater.
Declining Soil Health: A Threat to Food Security
India’s soils are under severe strain. Research indicates that only about a quarter of Indian soils have sufficient soil organic carbon (SOC), a critical indicator of soil health. Deficiencies in micronutrients like sulphur, iron, zinc, and boron are also widespread. This decline is a result of decades of intensive cropping, heavy reliance on nitrogen-heavy fertilizers, and insufficient organic matter application.
Poor soil health isn’t just an agricultural issue; it directly impacts the nutritional quality of food. Crops grown on nutrient-deficient soils tend to be lower in essential micronutrients, contributing to hidden hunger and health problems.
Failed Innovations and the Need for Reform
Attempts to address the issue, such as the introduction of nano urea in 2021, have yielded limited success. While initially touted as a game-changer, field studies have shown a significant drop in rice and wheat yields when using nano urea. The product’s adoption has been driven more by forced bundling with traditional urea purchases than by genuine farmer demand.
The core problem lies in the economic signals farmers receive. As long as urea remains drastically cheaper than other nutrients, its overuse will persist, regardless of monitoring or enforcement. The Economic Survey has recommended a modest increase in the retail price of urea, coupled with direct cash transfers to farmers on a per-acre basis, to incentivize balanced fertilization.
The Path Forward: A Multifaceted Approach
Addressing this crisis requires a multifaceted approach. Rationalizing fertilizer subsidies, promoting soil health testing, and encouraging the adoption of natural farming practices are crucial steps. Improving awareness among farmers about balanced nutrient management is also essential.
However, political considerations remain a significant hurdle. Governments fear that raising urea prices will be perceived as anti-farmer and trigger protests. A practical solution involves triangulating data from Aadhaar-linked sales, the PM-Kisan portal, and crop insurance databases to ensure targeted and efficient subsidy delivery.
restoring the health of India’s soils and ensuring the long-term sustainability of its agriculture requires a bold and decisive shift in policy, prioritizing long-term ecological and economic well-being over short-term political gains.
FAQ
Q: What is the biggest challenge facing Indian agriculture today?
A: The biggest challenge is the unsustainable cycle of low profitability, declining soil health, and a crippling dependence on fertilizer subsidies.
Q: Why are fertilizer subsidies so high?
A: India relies heavily on fertilizer imports, making it vulnerable to global price fluctuations. The government subsidizes fertilizers to protect farmers from these price increases.
Q: What is nano urea, and why hasn’t it been successful?
A: Nano urea was introduced as a potential solution to reduce fertilizer dependence, but field studies have shown it doesn’t deliver the promised yield improvements.
Q: What can be done to improve soil health in India?
A: Promoting balanced fertilization, encouraging organic farming practices, and improving soil testing are key steps to restoring soil health.
Q: What is the role of the government in addressing this crisis?
A: The government needs to rationalize fertilizer subsidies, invest in agricultural research, and create policies that incentivize sustainable farming practices.
