Development of balanced nutrient management innovations in South Asia: Perspectives from Bangladesh, India, Nepal, and Sri Lanka.

Imbalanced application of fertilizers is a major fiscal and environmental problem in South Asia. We review fertilizer policies and extension efforts to promote the balanced application of nutrients in Bangladesh, India, Nepal, and Sri Lanka and draw 4 important lessons. (1) Fertilizer sector reforms need to be fiscally sustainable and politically feasible. Governments in South Asia have abolished fertilizer subsidies on multiple occasions, only to restore them a few years later. (2) The use of phosphate and potash did not decline much even after a sharp increase in their prices in India in 2011-12. Therefore, rationalizing subsidies, while necessary, may not be sufficient to ensure balanced use of fertilizers. Changing farmers' practice requires combining the right incentives with the right information. (3) Soil test based soil health cards (SHC) hold promise, but there is limited evidence on their utility. India's SHC program had very little impact on fertilizer use. (4) Direct cash transfer (DCT) of fertilizer subsidies can reduce distortions, but Sri Lanka's experience shows that implementing it is more challenging than universal subsidies. DCT requires the removal of price controls, integration of land records, farmer identity cards, a cash transfer system with universal coverage, and a competitive fertilizer retail sector.