Fertilizer Subsidy Scheme 2026 - DBT in Urea Subsidy to Farmers

Fertilizer Subsidy Scheme 2026 is a central government scheme under which the Department of Fertilizers keeps urea and other fertilizers affordable for farmers. The DBT in Fertilizers system is fully running in the country, with 100% of the subsidy on various fertilizer grades released directly to fertilizer companies based on Aadhaar-authenticated sales made to farmers through point of sale (PoS) machines at retail shops.

For the financial year 2026-27, the Union Budget has set aside about ₹1.71 lakh crore for the Department of Fertilizers. This amount is meant to protect farmers from swings in global fertilizer prices and to make sure urea and other fertilizers stay available at controlled prices during every cropping season.

Fertilizer Subsidy Scheme 2026

The DBT in Fertilizers system was rolled out across the country from April 1, 2018. Under this system, subsidy claims are paid on a first-in-first-out (FIFO) basis, which means the claims that come in first are settled first. This keeps the payment process timely for fertilizer companies.

Before the start of each cropping season, the Department of Agriculture and Farmers Welfare works with the state governments to check the state-wise and month-wise requirement of fertilizer. Based on this, the Department of Fertilizers allocates the required quantities to states through a monthly supply plan and keeps a close watch on availability.

The movement of all major subsidized fertilizers is tracked across the country through an online web-based system called the integrated Fertilizer Management System (iFMS). This helps the government spot shortages early and take quick action so that farmers do not face a lack of fertilizer during the sowing season.

How DBT in Fertilizer Subsidy Works

Farmers buy urea and other fertilizers from authorized dealers at the low maximum retail price (MRP). At the time of purchase, the farmer's Aadhaar is verified on the PoS machine at the shop. This record of the sale is what the government uses to release the subsidy to the fertilizer company.

STEP 1 - Go to an authorized fertilizer retail shop and buy the required fertilizer at the fixed MRP.

STEP 2 - Give the Aadhaar number for verification on the point of sale (PoS) machine at the shop.

STEP 3 - The sale is recorded in the system, and the fertilizer company gets the subsidy payment based on this verified sale.

Budget Allocation for 2026-27

The Union Budget 2026-27, presented by Finance Minister Nirmala Sitharaman, has kept the focus on affordable fertilizers. A net allocation of about ₹1.71 lakh crore has been made for the Department of Fertilizers for the financial year 2026-27.

This amount covers the Urea subsidy for both indigenous production and imports, and also supports the Nutrient Based Subsidy (NBS) scheme for phosphatic and potassic (P&K) fertilizers. The DBT system in fertilizer subsidy remains part of the delivery, along with the Fertilizer Subsidy Management System.

Urea Subsidy Scheme for Farmers

Urea is sold to farmers at a statutorily controlled MRP. A 45 kg bag of conventional urea costs about ₹240, which is far below the cost of producing or importing it. The difference between the low MRP and the cost of supply is paid to the company as subsidy.

This keeps urea cheap for farmers while making sure producers and importers get a reasonable return. The subsidy on urea has grown over the years because of the rise in production and import costs, and the government has kept the MRP unchanged to protect farmers.

Direct Cash Transfer to Farmers

Union Agriculture Minister Shivraj Singh Chouhan has raised the idea of moving from the current manufacturer-based subsidy system to a direct cash transfer of the subsidy into farmers' bank accounts. He made this point while addressing the Pusa Krishi Vigyan Mela in February 2026.

Under this model, a farmer would get a fixed subsidy amount per hectare and could then choose which fertilizers to buy based on the soil and crop needs. The benefit would reach the intended farmer directly, and large farmers would not corner a bigger share of the subsidy. This idea is still under discussion, and no final decision has been announced.

Benefits of DBT in Fertilizer Subsidy

The DBT in Fertilizers system brings several benefits for farmers and the government.

• Farmers get urea and other fertilizers at the low MRP, so the subsidy benefit reaches them at the time of purchase.
• The Aadhaar-verified PoS sale record helps the government release 100% subsidy to companies on actual sales, which reduces leakage.
• The FIFO payment system keeps subsidy claims moving on time, so fertilizer companies do not face long payment delays.
• Real-time monitoring through the iFMS system helps the government track fertilizer movement and keep shortages under control.
• The system makes the whole process easy to track, with clear records of sales and subsidy payments.

Soil Health Card to Prevent Overuse of Fertilizers

Farmers often tend to overuse fertilizers and pesticides in the hope of higher yields, which raises input costs and harms soil. To deal with this, the central government runs the Soil Health Card scheme, which helps farmers balance the use of fertilizers and pesticides based on the actual condition of their soil.

Unlike the gas or food subsidy, where the benefit goes directly to the beneficiary, fertilizer subsidy is universal in nature and is paid to the manufacturer. The DBT in Fertilizers system has helped the government save money by plugging leakages in fertilizer sales. For more details on the related support, farmers can also check the PM Kisan Samman Nidhi Yojana and the NBS Scheme.

FAQ's

What is the Fertilizer Subsidy Scheme 2026?

It is a central government scheme under which the Department of Fertilizers keeps urea and other fertilizers affordable for farmers. The DBT in Fertilizers system releases 100% subsidy to companies on Aadhaar-verified sales to farmers.

How does a farmer get the fertilizer subsidy?

The farmer buys fertilizer at the low MRP from an authorized dealer. The subsidy is paid to the fertilizer company after the Aadhaar-verified sale is recorded on the PoS machine.

What is the MRP of a urea bag?

A 45 kg bag of conventional urea costs about ₹240, which is much lower than the cost of producing or importing it.

Is the subsidy being paid directly to farmers?

Not yet. The subsidy is currently paid to fertilizer companies. The government has discussed the idea of a direct cash transfer to farmers' bank accounts, but no final decision has been announced.

For more details, visit the official website of the Department of Fertilizers at Fertilizer Subsidy page and the DBT Sections page.