Chemical fertilizer subsidies 'undermining' India's push for organic farming

By Prof Hemantkumar Shah 

Organic farming refers to cultivation without the use of chemical fertilizers and pesticides. Organic manure can be bought and sold, while natural farming generally involves the use of locally available materials as inputs. In India, the term “organic farming” is often also used for natural farming. In 2023–24, only about 2.5 to 3 percent of India’s total cultivated land, around 45 lakh hectares, was under organic farming. 

Out of nearly 15 crore farmers in the country, only about 40 lakh were practicing organic farming. The leading states in this sector are Madhya Pradesh, Maharashtra, Gujarat, and Rajasthan, while Sikkim became a fully organic state in 2016. During 2023–24, organic farming production in India was only around 36 lakh tonnes.

Organic farming is often considered essential for environmental protection and human health. However, it is also true that during the 1960s and 1970s, the Green Revolution significantly increased wheat and rice production, enabling India to become self-sufficient in food grains by the 1980s. Many economists and scientists argue that without the increased use of pesticides and chemical fertilizers, this achievement would not have been possible and India would have remained dependent on grain imports.

The Union Budget for 2026–27 indicates that out of the government’s total budget of about Rs 54 lakh crore, only Rs 11,000 crore has been allocated for agricultural development, and merely Rs 750 crore for organic farming. The government claims this amount will encourage one crore farmers to adopt organic farming. This means an average incentive of only about Rs 750 per farmer. It is difficult to understand how such a small amount can meaningfully promote organic farming across the country. Organic products are generally more expensive than conventional products, and ordinary consumers are often unwilling to purchase them. The government also provides no subsidy for these products.

The Gujarat government too has not allocated any substantial budget for organic farming. Though much publicity is given to cow-based natural farming, the state government’s allocation for it has not exceeded an average of Rs 250 crore annually over the past five years. Gujarat has around 53 lakh farmers. It is doubtful whether such an amount can adequately support them in shifting to organic farming. In the Gujarat government’s 2026–27 budget of Rs 4.04 lakh crore, only Rs 150 crore has been allocated for cow-based natural farming.

A Natural Farming Science University was established in Gujarat in 2022, although the announcement for it had been made four years earlier in the budget itself. This suggests that governments are not particularly serious about promoting organic farming.

At the same time, the central government continues to provide massive subsidies on chemical fertilizers. It is estimated that in 2025–26, subsidies worth Rs 1.67 lakh crore were provided for chemical fertilizers. As a result, farmers get these fertilizers cheaply and continue to use them extensively. Subsidies on urea and other fertilizers have been part of policy ever since the Green Revolution began during the Third Five-Year Plan in the early 1960s.

If the government genuinely wanted to encourage organic farming, it could gradually end these subsidies and allow chemical fertilizers to be sold at market prices. However, this is not done because governments fear farmers’ reactions. Thus, fertilizer subsidies are not merely an economic issue but also a political one.

India also imports a large quantity of chemical fertilizers, involving significant expenditure in dollars. Farmers are often advised to adopt organic farming to save foreign exchange. While India is relatively self-reliant in urea production, fertilizers such as DAP and MOP are almost entirely imported. In 2025–26, India reportedly imported about 15 billion dollars worth of these fertilizers. If saving foreign exchange were truly a priority, these imports would need to be reduced, which could naturally push farmers towards organic farming. But governments are unwilling to take such risks. Moreover, around 14 government and cooperative companies manufacture chemical fertilizers. If there were a genuine commitment to organic farming, the government would need to announce a long-term plan to gradually phase out these companies over the next decade.

There is also no comprehensive policy framework for promoting organic farming. Farmers adopting organic methods should receive direct financial support. Those shifting away from chemical fertilizers and pesticides should be given subsidies during the transition period of around three years. Many experts point out that farmers often suffer production losses during the initial years after shifting to organic farming. Unless governments compensate for these losses, farmers are unlikely to be encouraged to adopt organic methods. Although the government speaks of building a “Developed India,” it has yet to formulate any major roadmap or allocate large-scale funding for organic farming.

The global market for organic products is estimated at around 36 billion dollars. In contrast, India’s organic market is only about 2.5 billion dollars, or roughly Rs 23,000 crore. India exports organic produce worth around Rs 5,400 crore. Unless both farmers and consumers receive incentives, neither the domestic market nor exports are likely to expand significantly.

It can therefore be argued that the strong lobby of companies involved in manufacturing and importing chemical fertilizers, along with their political connections, continues to prevent organic farming from truly gaining momentum.