CEEW’s report ‘Can Zero Budget Natural Farming Save Input Costs and Fertilizer Subsidies? Evidence from Andhra Pradesh?’ was launched by NITI Aayog in January 2020. The study offers insights into 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 (fertilizers and pesticides) for the farmer and estimates potential savings in fertilizer subsidies at different stages of ZBNF penetration for the state.
The study was conducted through a primary survey of around 600 farmers across all agro-climactic zones in Andhra Pradesh.
The key findings suggested that Andhra Pradesh can make huge potential savings by adopting Natural Farming. Some of the key findings were:
- On average, to cultivate rice, farmers spend Rs 5,961 per acre on chemical inputs. Those practicing ZBNF only spend Rs 846 per acre on natural inputs.
- ZBNF farmers cultivating maize spent Rs 503 per acre on natural inputs, whereas those using chemical inputs spent Rs 7,509 per acre.
- To cultivate groundnut, a farmer using chemical inputs spent Rs 1,187 per acre as against Rs 780 per acre spent by a ZBNF farmer.
- The median input cost of ZBNF farmers cultivating rice was Rs 12,200 per acre compared to Rs 14,700 spent by non-ZBNF farmers.
- For maize cultivators, the median expenditure per acre for ZBNF farmers was Rs 15,660 while that for non-ZBNF farmers was Rs 17,425.
- The median per acre input cost of ZBNF farmers for cultivating groundnut was, however, higher, Rs 12,483, as compared to a median of Rs 9,996 for the non-ZBNF group.
- A ZBNF farmer cultivating rice can avoid fertilizer consumption by 83% to 99%. For groundnut, ZBNF would lead to a usage reduction of almost 70% urea and 91% diammonium phosphate.
- Based on the actual reported consumption of fertilizers in the survey, the estimated annual subsidy outlay for Andhra Pradesh is Rs 2,154 crore. This estimate in the counterfactual scenario is only about 60% of the actual subsidy outlay for Andhra Pradesh, Rs 3,485 crores, for 2017–18.
- Against the counterfactual scenario calculated from the survey, Andhra Pradesh can save fertilizer subsidy worth Rs 517 crore if 25% of the cropped area (low policy scenario) in the state adopts ZBNF, even partially. Similarly, the annual subsidy savings would be Rs 1,553 crore with 75% (medium policy scenario) and Rs 2,071 crore with 100% (high policy scenario) cropped area under ZBNF.
- If ZBNF adaptors completely transition to this practice, with no use of chemical inputs, the subsidy savings would be Rs 539 crore annually in a low policy scenario. In a high policy scenario, the subsidy savings would be Rs 2,154 crore annually—100% savings against the counterfactual scenario.