Industry News

The Union Government Introduces PM PRANAM Scheme to Incentivize States to use non-Chemical Fertilizers

India: PM-PRANAM stands for PM Programme for Restoration, Awareness, Nourishment, and Amelioration of Mother Earth. Recently, on June 27, 2023, The Union Cabinet Committee on Economic Affairs (CCEA) approved PM-PRANAM which encourages the balanced use of fertilizers in conjunction with biofertilizers and organic fertilizers. The objective of the scheme is to incentivize states to use alternative, non-chemical fertilizers and reduce the subsidy burden on chemical fertilizers, which was around USD 27.40 Billion in 2022-2023. The CCEA also declared USD 1.77 Million subsidies to promote organic manure, and a decision to debut sulfur-coated urea (Urea Gold) to address the sulfur deficiency in the soil and reduce urea use.

Furthermore, under the scheme, a subsidy of USD 18.26 per tonne will be provided to support the marketing of organic fertilizers — fermented organic manures (FOM)/ liquid FOM/ phosphate-rich organic manures (PROM) produced as by-products from biogas plants/ compressed biogas (CBG) plants set up under umbrella GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan) initiative. The CCEA also approved the continuation of the urea subsidy program to allow farmers continued access to the fertilizer at the same price of USD2.95 per 45kg bag, excluding taxes and neem coating fees. Further, the government is also encouraging the use of Sulphur-coated urea which is more economical and efficient than the other kinds of urea. For example, the nitrogen absorption rate is 30 percent for conventional urea, 50 percent for neem-coated urea, and 80 percent for nano urea. Sulfur-coated urea increases nitrogen absorption efficiency to 78%. It is anticipated that it will address Sulphur deficiency in the soil in the country. 

According to the Chemicals & Fertilizers Minister of India , “PM-PRANAM is aimed at saving the soil and promoting sustainable balanced use of fertilizers. The scheme involves the participation of the state governments.” According to the Cabinet Committee on Economic Affairs (CCEA), ''The bouquet of schemes is focused on the overall well-being and economic betterment of farmers by promoting sustainable agriculture. The initiatives will boost farmers' income, strengthen natural/organic farming, rejuvenate soil productivity, and ensure food security". As per the Government of India, ‘’The use of sulfur coated urea will address Sulphur deficiency in the soil in the country. It will also save input costs for the farmers and raise incomes for farmers with enhanced production and productivity.’’

According to TechSci Research, the newly launched scheme by the Indian government will bring a positive impact on bio-fertilizers and organic fertilizers market. TechSci Research believes that the scheme emphases on organic and bio-fertilizers is likely to drive increased demand for these products. Therefore, fertilizer companies will need to expand their production capacity and diversify their production portfolios to cater to the growing demand for organic and bio-fertilizers. This shift will present an opportunity for existing fertilizers manufacturers as well as new entrants that are specialized in organic and fertilizers. Moreover, TechSci Research also believes that the scheme will transform the dynamics of the fertilizers market and the industry will go through a paradigm shift as the demand for organic and bio-fertilizers will surge the demand for chemical fertilizers will continue to decline in the forecast period.