Chandigarh: Despite massive central subsidies aimed at shielding farmers from rising global fertilizer prices, small retailers and traders in Punjab are staring at widespread closures due to rampant black marketing and coercive bundling practices by suppliers.
SNPNEWS.IN News (Punjab): Under the Nutrient Based Subsidy (NBS) scheme, the Government of India provides significant support to keep urea and DAP affordable for farmers. The Union Budget 2026-27 allocated ₹1,70,944 crore for fertilizer subsidies, but officials expect the actual outlay to cross ₹2 lakh crore owing to soaring international raw material costs and geopolitical instability in West Asia.
The policy ensures urea reaches farmers at a controlled MRP of around ₹266 per bag and DAP at ₹1,350 per bag. However, ground-level implementation has gone awry. For the past 3–4 years, fertilizer companies and rake handlers have allegedly compelled retailers purchasing subsidized stocks to also buy non-subsidized products — including micoraza, bentonite sulphur, bio potash, PROM, PSB liquid, Nano DAP/urea, and liquid zinc — at nearly double their market value.
Read this:The Crisis Of DAP & UREA Fertilizers In The State In 2025
These forced purchases, often ranging from 5 to 15 metric tonnes per retailer, are now lying unsold and deteriorating in godowns across the state, inflicting heavy financial losses.
Faced with acute shortages of legitimately subsidized stock, many retailers have been forced to procure urea at ₹320–350 per 45 kg bag and DAP at ₹1,600–1,700 per 50 kg bag from informal channels. Industry sources say individual traders are incurring losses of ₹3 lakh to ₹10 lakh, a burden many small shops cannot sustain.
The crisis is compounded by the distressed state of Punjab’s farmers. Successive seasons of low yields and subdued crop prices have left cultivators struggling to repay credit extended by input dealers for seeds, pesticides, and fertilizers. This dual squeeze — unsold inventory on one side and mounting bad debts on the other — has pushed many small traders to the brink.
“If black marketing and coercive sales continue unchecked, a large-scale shutdown of fertilizer and pesticide outlets is inevitable,” warned traders. Such closures could result in the loss of livelihoods for lakhs of people directly or indirectly dependent on the agri-input supply chain, dealing a severe blow to Punjab’s rural economy.
Stakeholders are urging the Punjab Agriculture Department and the state government to immediately crack down on black marketing, enforce transparent distribution of subsidized fertilizers, and prevent forced bundling of slow-moving products. Swift regulatory intervention is seen as critical to saving thousands of small businesses and maintaining the last-mile delivery network that farmers rely on.