How to Operationalize Dbt in Fertilizer Industry.
Business and Management
Submitted By Shwetakumarisahu
How to operationalize DBT in Fertilizer Subsidy
“It isn’t the farm that makes the farmer. It’s the love, hard work and character”.
We are so busy with our lives that we don’t take a minute out to think about the people who are the reason behind our living, our food and our life. We pay the doctor to make us better when we should really be paying the farmer to keep us healthy. We are indebted to people around us and not doing a bit to the people because of whom our lives are running without glitches. Agricultural sector employs more than 50% of India’s population and contributes only 14% of the GDP. This indicates the drastic inequality in terms of earning when compared to urban population who are mostly employed in either manufacturing or service sectors. Various governments have changed in the Centre and state has changed over the last 65 years without solving the crux of the problem faced by the farmers. Farmer suicides account for 11.2% of the suicides in India. We are still ignorant about it in spite of several organizations and activists fighting for the rights and the voice of the farmers. Their hands are tied not by ropes but by the greed of the intermediaries that the system has generated, who eat up the farmer’s income while it is on its way into his hands.
The real cause of hunger is the powerlessness of the poor to gain access to the resources they need to feed themselves. Since agriculture is a very important sector it goes without saying that the fertilizer industry is one which the Indian economy cannot do without. The fertilizer industry in India is extremely vital as it manufactures some of the most important raw materials required for crop production. DBT is the ray of hope for the poor.
The Union Government on January 1, 2012 launched its much-awaited ambitious programme-Direct Benefits Transfer (DBT) scheme in 20 districts of the country; with 7 seven schemes under its ambit. DBT is poverty reduction measure in which government subsidies and other benefits are given directly to the poor in cash rather than in the form of subsidies. The DBT programme aims that entitlements and benefits to people can be transferred directly to them through biometric-based “Aadhaar” linked bank accounts, thus reducing several layers of intermediaries and delays in the system. Aadhaar contains biometric of a person, which is unique and the 12-digit number generated is also unique. It also contains the address and other details of the person. This number can be linked to a person bank account. Now all most everyone has a bank account and almost each and every village has been connected by the banks. All the credit goes to vision of our current Prime Minister, Shri Narendra Modi to link every individual with the financial institution of India. For making this vision come true he started the Scheme of Pradhan Mantri Jan Dhan Yojna (PMJDY) under which people can open zero balance bank account and not only this they can even enjoy all the benefits a general bank account holder avails .
The PMJDY has been a successful scheme under which 19.02 crores people have opened their account. Apart from this the government has enrolled Fertilizer Monitoring System (FMS) in 2007 a web based software application system which monitors the dispatches of material to over 600 districts via 750-odd railway rake points. From 2012, the system has extended its coverage to nearly 1.6 lakh fertilizer retailers. During 2014-15 around 38 lakh- odd invoices involving the sales of 54mt of fertilizers up-to the retails point was posted FMS.
Accroding to Minister of State for Chemicals and Fertilizers Hansraj Gangaram Ahir, major challenge in operationalizing DBT in fertilizer lies in identification of beneficiary farmers as in many states the land records are neither accurate nor updated. Therefore, the Department of Fertilizers plans to have a phased approach and prepare a road map for pilot project in select districts to capture the details or identity proof of buyer’s such as Aadhaar Number or land details at retail fertilizer stores in order to build a comprehensive database of beneficiary farmers over a period of time.
IFFCO (Indian Farmers Fertilizer Cooperative Limited) , in 2014-15, sold 11.13 million tonnes (mt) of fertilizers — one in every five bags bought by farmers in India — including 7.19 mt of urea, 1.89 mt of di-ammonium phosphate (DAP) and 2.02 mt of complex fertilizers. The first requirement for DBT is a system to track the movement of every bag of fertilizer, right from the manufacturing plant or port of import till the last-mile point of sale to the farmer. As per the article published in Indian express dated 11 June, 2015 by Harish Damodaran, ‘The next step is to capture transactions from the retail level to the farmer. For this, we need to build a farmers’ database and enter it in a centralized system, which could then be used to develop a platform for tracking sales from the retailer end. This middleware platform can be further integrated with banking software, to enable transfer of subsidy to a farmer’s account whenever a transaction happens and is captured in the system’.
For reaching the potential beneficiary under DBTF there is a need for two way approach which has to be carried out simultaneously in the following manner:
• In Phase I there will be the survey of all the land records. Based on the category or type of land it will be divided into two group agricultural and non-agricultural lands. Those people who have land and not yet got the paper of their land records will be provided necessary assistance to obtain the land record paper. For this boot camps need to be organized at different Blocks and Panchayat. Apart from this there will be proper identification of landless labourers, marginal farmers, small farmers, and big farmers. Then they will be sub divided into sub-segments based on the land coverage, type of crop they grow, method of agriculture they practice, amount of fertilizers they uses, and so on. After collecting this data a proper data base will be formed containing the details of each and every farmer, which will be updated periodically by setting a kiosk in the local panchayats, Blocks, and districts of each and every state.
• In Phase II there will be the identification of the bank account and UID holders. There will be a monitoring channel which will be responsible for proper seeding of UID in the bank account. This database will also be connected with FMS so that the farmers procuring fertilizer can easily be identified. Just like the DBTL scheme the farmers will pay the total amount for the fertilizer and the subsidy amount will be directly transferred to that farmer. For this to happen, there need to generate the computerized billing using a particular software which will be developed by Government of India. So that it will be easy to monitor the use of fertilizer by the farmers.
“I still believe in amber waves of grain, man on his knees praying for rain that grew this country strong and keep us moving on. They get tougher as their lives keep getting harder. Oh, I think it’s time we all thank a farmer”.