Upcoming agriculture year: Season of scarcity, rich for reform

India’s fertilizer sector is heavily regulated, leading to massive fiscal burdens and market distortions. Currently, urea is sold at a statutorily controlled Maximum Retail Price (MRP), while complex fertilizers like Di-ammonium Phosphate (DAP) are governed by the Nutrient Based Subsidy (NBS) scheme, which provides a fixed subsidy per nutrient kilogram. The editorial argues that artificially underpricing fertilizers during global supply shortages only aggravates scarcity, black-marketing, and unscientific overuse (skewing the NPK ratio in soils). Instead of subsidizing the product, the government should deregulate all fertilizer prices and shift to an unconditional Direct Benefit Transfer (DBT). By merging the fertilizer subsidy budget with the PM-Kisan database—a central sector scheme providing Rs 6,000 annually to landholding farmers—India could implement a flat per-acre income support system. This structural reform would encourage farmers to use alternative or organic nutrients, promote balanced fertilization, and reduce the government's subsidy bill while protecting vulnerable farmers.

Indian agriculture's vulnerability to monsoon vagaries is well documented, and the forecast of a below-normal monsoon at 92 percent of the Long Period Average (LPA) presents a serious threat. This deficit is largely driven by the anticipated El Niño phenomenon, which involves the abnormal warming of sea surface temperatures in the central and eastern equatorial Pacific Ocean, historically suppressing the Southwest monsoon. While India has built some resilience against subnormal rains through improved irrigation coverage, water availability is only one part of the equation. Crops also require optimal temperatures and sufficient nutrients to thrive. A strong El Niño event often leads to warmer-than-normal winters, which directly impacts the subsequent Rabi crops like wheat by reducing the critical cold days required for grain filling. Therefore, the combination of moisture stress during Kharif and heat stress during Rabi creates a compounded risk for the 2026-27 agricultural cycle.

The ongoing crisis in agricultural inputs is a stark reminder of India's massive import dependency and the geopolitical vulnerability of its food security. Unlike the 2008 global financial crisis or the 2022 Russia-Ukraine war, which primarily caused temporary price shocks, the current West Asia conflict is creating an absolute, structural supply shock. India imports the vast majority of its plant nutrients because it lacks domestic reserves of natural gas (a critical feedstock for ammonia and urea production), rock phosphate, potash, and mineable sulphur. The effective closure of the Strait of Hormuz—a narrow maritime chokepoint connecting the Persian Gulf to the Gulf of Oman—has paralyzed nearly a third of the world’s seaborne fertilizer trade. Compounding this supply chain rupture, dominant global suppliers like China and Russia have imposed export restrictions to prioritize their own domestic markets. For UPSC aspirants, this highlights how international relations and maritime security directly dictate domestic inflation and agricultural stability.