The central government established the National Seeds Corporation in 1963 and the State Farm Corporations of India in 1969 to encourage production and distribution of certified seeds of various crops. Thirteen state seed corporations were established to arrange production and distribution of certified seeds. Production of breeder seed was organized by the Indian Council of Agricultural Research through interested breeders and scientists. The National Seeds Corporation and State Farm Corporations of India also produced breeder seeds. The availability of breeder seeds increased eightfold during the 1980s, from 391.4 tons in FY 1981 to 3,213 tons in FY 1988.

The production and availability of seeds has increased enormously since the late 1970s. The distribution of certified and quality seeds showed an increase from 140,000 tons in FY 1979 to 568,000 tons in FY 1988. A buffer stock of seeds is maintained by the National Seeds Corporation for the northeastern states and by the State Farm Corporations of India for the other states against such unforeseen contingencies as floods, droughts, and diseases.

Fertilizer

The rate of fertilizer consumption increased dramatically after independence, although it was still lower than in most other countries worldwide. India used only sixty-nine kilograms per hectare in 1989, ranking it fifty-sixth worldwide and below all its South Asian neighbors except Nepal. Fertilizer consumption increased from approximately 69,000 tons of nutrients in FY 1950 to 12.6 million tons in FY 1990, and was expected to be about 13.8 million tons in FY 1993. Punjab used the highest amount of fertilizer per hectare followed by Tamil Nadu. The use of fertilizers was high in Punjab and Harayana in the north because of adequate irrigation. In the south, other than in Tamil Nadu, consumption, especially in Andhra Pradesh and Kerala, was higher than the national average. The disparity in the use of fertilizers across states was decreasing, however. Cow dung is an important source of fertilizer--and fuel--in India. Statistics on its usage, however, are not available.

The fertilizer subsidy has been growing since FY 1976. The initial subsidy was a response to the increase in the price of crude oil by the Organization of the Petroleum Exporting Countries (OPEC--see Glossary). The price increase led to a rise in the cost of naphtha, which in turn increased fertilizer prices. The fertilizer subsidy increased from Rs600 million in FY 1976 to Rs32 billion in FY 1988, to nearly Rs44 billion in FY 1990. Further increases are expected as the decade progresses. Plans in 1992 to cut the subsidy by 40 percent were curtailed following heavy political opposition from the major farming states.

Data as of September 1995