A recent study by the Council on Energy, Environment and Water offers insights into Zero Budget Natural Farming (ZBNF) vis-à-vis its effect on the economics of agriculture in Andhra Pradesh. The study titled ‘Can Zero Budget Natural Farming Save Input Costs and Fertiliser Subsidies? Evidence from Andhra Pradesh’ compares costs of ZBNF inputs and practices with the costs of chemical inputs such as fertilisers and pesticides for the farmer. It also estimates the potential savings in fertiliser subsidies at different stages of ZBNF penetration for the state.

The study is a first-of-its-kind, independent evaluation of zero budget natural farming that shows the multiple benefits of shifting away from chemical farming practices. It was conducted through a primary survey of about 600 farmers across all agro-climactic zones in Andhra Pradesh. It attempts to look at the budgetary savings that come from alternative agricultural practices.

At scale, ZBNF can have a transformational impact on fertiliser subsidies, farmer livelihoods, food security as well as climate change in India.

Post green revolution, agriculture in India has relied heavily on chemical fertilisers and pesticides, whose excessive use has led to diminishing marginal utility resulting in declining net incomes and growing debt for farmers. It also poses a threat to soil health, groundwater purity, local biodiversity and human health. The inherent unsustainability of chemical-based agriculture and its contribution to the ecological and agrarian crises have led to a demand for sustainable agriculture practices.

ZBNF – a sustainable agricultural system – is one such alternative to chemical fertiliser based and high input cost agriculture. The practice advocates 100 percent elimination of synthetic chemical inputs (fertiliser and pesticides) and encourages the application of natural mixtures made using cow dung, cow urine, jaggery, pulse flour etc., mulching practices, and symbiotic intercropping.

Andhra Pradesh scales up ZBNF

In 2015, the Government of Andhra Pradesh mandated Rythu Sadhikara Samstha, a state-owned, non-profit organisation to scale-up ZBNF practices to cover all six million farmers and eight million hectares of agricultural land in the state by 2024. The programme aims to promote climate-resilient, chemical-free, ecological agriculture and provide small and marginal farmers with profitable livelihoods from agriculture.

As of July 2019, more than 500,000 farmers have enrolled in the programme across all 13 districts in Andhra Pradesh, covering an area of around 204,000 acres.

ZBNF could potentially reinvigorate rural economies and reduce credit risks for farmers caused by high-input resource-intensive chemical farming.

The burden of fertiliser subsidy

Fertiliser subsidy in the country amounting to close to INR 79,960 crore in 2019-20 constitutes a sizeable portion of the government’s agricultural subsidies. The urea subsidy alone corners more than 60 percent of the allocation, the rest being nutrient-based subsidies. The total outlay on fertiliser subsidies in 2017–18 in Andhra Pradesh alone is INR 3,485 crore.

The study captured information on the socioeconomic characteristics of the farmers and data on their landholding size, crops cultivated, input costs, and chemical and natural fertiliser consumption.

Multi-cropping and inter-cropping encouraged under ZBNF

In the study sample, out of the 254 ZBNF farmers, 77 percent use all-natural inputs and the remaining 23 percent are partial ZBNF farmers as the transition from chemical-based practices to natural farming is an incremental and iterative process. Almost twelve percent of ZBNF farmers were growing fruits and vegetables as their main kharif crop as compared to three percent of non-ZBNF farmers.

The study establishes the fertiliser savings potential with the scaling-up of ZBNF, but further rigorous evidence is needed to understand ZBNF’s impact on improving crops’ climate resilience, the soil health, local biodiversity, and water-use in agriculture.

When scaled up, ZBNF could significantly reduce fertiliser requirement and consequently the fiscal allocation for fertiliser subsidies, while potentially ensuring chemical-free food to billions of Indians across the country.

Budgetary savings in ZBNF

The study found that if ZBNF was scaled up across Andhra Pradesh, it would considerably alter the landscape of chemical inputs in agriculture, particularly fertilisers. The avoided fertiliser subsidies from scaling ZBNF would lead to significant budgetary savings, which could be redirected towards more sustainable uses, including funding ZBNF scaling up efforts. Some key findings include -

• 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 percent. For groundnut, ZBNF would lead to reduction of urea use by almost 70 per cent in urea and diammonium phosphate (DAP) use by 91 percent.
• 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 percent 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 percent 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 percent (medium policy scenario) and INR 2,071 crores with 100 percent (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 percent savings against the counterfactual scenario.

The study was carried out to improve the current understanding of ZBNF and aims to highlight the differences between ZBNF cohorts and those practising chemicals-based agriculture in terms of fertiliser consumption. It also provides an estimate for the savings in fertiliser subsidies resulting from reduced fertiliser consumption due to ZBNF adoption.

The full study can be accessed here