Increasing Subsidy for Fertilizer Consumption

By CnAgri2013-01-11 09:31:27 Print The government provided RMB107.8 billion subsidy for farmers’ purchase of farm supplies in 2012, an increase of 29.1% on the year-on-year basis. Since 2006, the government’s farm supply subsidy has increased at an annul rate of 55% on average.
 
Assuming fertilizer cost accounting for 70% of total farm supply cost, RMB75 billion subsidy was estimated to be spent on fertilizer in 2012. Calculating at annual 50 million MT (nutrient) fertilizer consumption for farm production, farmers received a fertilizer subsidy of RMB1,500/MT, equal to RMB690/MT (product) to urea buyers.
 
According to the State Development Commission, of the cost of grain production in 2012, the cost of fertilizer was RMB2,100/hectare. Farm supply subsidy accounted for 35% of fertilizer expenses, though in reality, some amount of the subsidy was not spent on fertilizer.

     

From “China Fertilizer Market Weekly Report”