The Ministry of Food, Agriculture and Livestock (Minfal) has proposed Rs 22.5 billion subsidy on fertilisers in the coming budget 2008-09 against Rs 17 billion allocated in the budget 2007-08, sources told Business Recorder here on Wednesday. DAP is the only fertiliser that is being subsidised by the government. As in the budget 2007-08, it was decided to provide the subsidy of Rs 17 billion while giving Rs 470 subsidy on each bag of 50 kg of DAP. Minfal has proposed total subsidy of Rs 13.2 billion on DAP and Rs 4.9 billion on urea. The estimated offtake for DAP is 1400,000 tons whereas for urea it is 350,000 tons. Sources told Business Recorder that the recommended subsidy per ton of DAP is Rs 9,400. The total consumption of fertilisers in the domestic market is 1.2 million tons. "Almost 0.7 million tons is produced locally while we import 0.5 million tons," sources added. Sources said: "It is true that it would be very difficult for the government to increase the amount of subsidy in the coming budget from Rs 17 billion to Rs 22.5 billion because of the skyrocketing prices of DAP in the international market and, in order to facilitate farmers against high cost of production, it has become the need of the hour to increase the amount." During the last six months (November 2007-April 2008), the prices of DAP have increased by 50 percent. Price of DAP has been speedily rising in November 2007 the price stood at Rs 1,400, in January 2008, Rs 1,700 in February, Rs 2,300 in March, Rs 2,500 and in April Rs 2,800. It is a common practice with the fertiliser producers to spread rumours of a shortage while in reality the manufacturers' agents or stockists are asked to hoard the produce and create an artificial shortage to raise prices. Moreover, fertiliser offtake is reported directly from sales figures of the fertiliser producers, which is clearly a wilful deception. The cost of inputs is rising each day and due to high price of DAP in 2007-08, farmers have minimised the use of DAP which resulted in lower yield. Copyright Business Recorder, 2008