The challenges in implementing a direct cash
transfer system for fertilisers are daunting. This paper points out that
they range from the very large number of beneficiaries to volatile
fertiliser prices, necessitating market price indexation of cash
transfers and controlling the market power of dealers, especially in
remote areas. The imbalance in the use of different fertilisers is also a
growing problem. If designed properly, a DCT should be accompanied by
significant investment in soil testing and the payment should be tied to
balanced use of fertilisers, including micronutrients.
