This paper examines trends in fertilizer subsidy and the issue of distribution of fertilizer subsidies between farmers and fertilizer industry, across regions/ states, crops and different farm sizes.Says that the proposed policy of direct transfer of fertiliser subsidy to farmers is misconceived and inappropriate.

Agricultural subsidies that encourage production and productivity have been widely criticized because of the cost of subsidies and they are perceived to be far from uniformly distributed. There is a general view in academic, policy and political circles that agricultural subsidies are concentrated
geographically, they are concentrated on relatively few crops and few producers and in many cases do not reach the targeted group(s). One of the most contentious issues surrounding input subsidies in general and fertilizer in particular in India is how much of what is paid out actually finds its way into
the pocket of the farmer, and how much is siphoned away by the input companies. There has also been a debate about the issue of real beneficiaries of fertilizer subsidy like small vs. large farmers, well-developed vs. less developed regions, etc. Therefore, there is need to understand the fertilizer subsidy distribution pattern to assess whether the subsidy benefits the target group(s), an argument often made while giving any farm subsidy. This paper examines trends in fertilizer subsidy and the
issue of distribution of fertilizer subsidies between farmers and fertilizer industry, across regions/states, crops and different farm sizes. The paper shows that general perception that about one-third of fertilizer subsidy goes to fertilizer industry is misleading because the underlying assumptions (i) that India