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Can Zero Budget Natural Farming Save Input Costs and Fertiliser Subsidies? Evidence from Andhra Pradesh

Niti Gupta, Saurabh Tripathi, Hem Himanshu Dholakia
January 2020 | Risks & Adaptation

Suggested Citation: Gupta, Niti, Saurabh Tripathi, and Hem Himanshu Dholakia. 2020. Can Zero Budget Natural Farming Save Input Costs and Fertiliser Subsidies? Evidence from Andhra Pradesh. New Delhi: Council on Energy, Environment and Water.

Overview

This study offers insights into Zero Budget Natural Farming (ZBNF) vis-à-via its effect on the economics of agriculture in Andhra Pradesh. It compares costs of ZBNF inputs and practices with the costs of chemical inputs (fertilisers and pesticides) for the farmer and also estimates the potential savings in fertiliser subsidies at different stages of ZBNF penetration for the state. The study was conducted through a primary survey of about 600 farmers across all agro-climactic zones in Andhra Pradesh.

ZBNF farmers mulching a field with groundnut shells.

Key Highlights

  • In 2019–20, India’s expenditure on fertiliser subsidies is projected to increase to INR 799,960 million (approximately, USD 11,000 million) from the revised estimate of INR 700,857 million (USD 9,725 million) in 2018–19.
  • ZBNF advocates the use of natural fertilisers and pesticides in a total shift from external synthetic chemical inputs (fertiliser and pesticides). It encourages the application of natural mixtures made using cow dung, cow urine, jaggery, pulse flour etc., mulching practices, and symbiotic intercropping.

Key Findings

  • On an average, to cultivate rice, farmers spent INR 5,961 per acre on chemical inputs while farmers who were practicing complete ZBNF spent INR 846 per acre on natural inputs.
  • ZBNF farmers cultivating maize spent INR 503 per acre on natural inputs, whereas farmers using chemical inputs, on an average, spent INR 7,509 per acre.
  • To cultivate groundnut, a farmer using chemical inputs spent INR 1,187 per acre as against INR 780 per acre spent by complete ZBNF farmer.
  • The median input cost of ZBNF farmers cultivating rice was INR 12,200 per acre compared to non-ZBNF farmers who reported it to be INR 14,700.
  • For maize cultivators, the median expenditure per acre for ZBNF farmers was INR 15,660 while that for non-ZBNF farmers was INR 17,425.
  • The median per acre input cost of ZBNF farmers cultivating groundnut was, however, higher - INR 12,483 - as compared to the median of INR 9,996 for the non-ZBNF group.
  • A ZBNF farmer cultivating rice can avoid fertiliser consumption by 83 to 99 per cent. For groundnut, ZBNF would lead to reduction of urea use by almost 70 per cent in urea and diammonium phosphate (DAP) use by 91 per cent.
  • Based on the actual reported consumption of fertilisers in the survey, the estimated annual subsidy outlay for Andhra Pradesh is 2,154 crores. This estimate in the counterfactual scenario is only about 60 per cent of the actual subsidy outlay for Andhra Pradesh - INR 3,485 crores - for 2017-18.
  • Against the counterfactual scenario calculated from the survey, Andhra Pradesh can save fertiliser subsidy worth INR 517 crore if 25 per cent of cropped area (low policy scenario) in the state adopts ZBNF, including partial ZBNF. Similarly, the annual subsidy savings would be INR 1,553 crore with 75 per cent (medium policy scenario) and INR 2,071 crores with 100 per cent (high policy scenario) cropped area under ZBNF.
  • If ZBNF adaptors completely transition to the practice with no use of chemical inputs, the subsidy savings would be INR 539 crore annually in a low policy scenario. In a high policy scenario, the subsidy savings would be INR 2,154 crore annually a 100 per cent savings against the counterfactual scenario.

With a complete shift to ZBNF and with no use of chemical inputs, Andhra Pradesh can save INR 2,154 crore subsidy spending annually.

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