The government will spend roughly Rs. 7.1 billion to shield farmers from sharp rises in fertiliser prices, President Anura Kumara Dissanayake announced in Parliament on Tuesday (7), with the Treasury absorbing the gap between import costs and the price farmers pay at the storeroom door.
Under the package, the State has committed Rs. 6.5 billion to expanded fertiliser support and a further Rs. 600 million to direct subsidy payments. The government will purchase urea at the prevailing market rate of Rs. 13,500 to Rs. 14,000 per bag and sell it to farmers at a fixed Rs. 10,200 per bag for the third paddy season, absorbing the difference.
Direct payments have also been lifted. Paddy farmers will receive a Rs. 30,000 subsidy, up from Rs. 25,000, while subsidiary crop farmers in the Yala season will get Rs. 18,000, raised from Rs. 15,000. Small-scale tea plantation owners will be granted a one-time additional payment of Rs. 5,000 per fertiliser bag.
The package forms part of the broader concessional relief programme Dissanayake presented to the chamber on Tuesday and lands ahead of the Sinhala-Tamil New Year and the start of the Yala cultivation season. It complements the 25,000 MT fertiliser shipment due in April, which addresses physical supply rather than price.
Government officials have linked the spike in international urea prices to the same Middle East energy shock driving local fuel and gas costs higher, including the Israeli strike on the South Pars petrochemical complex — a major global feedstock for nitrogen fertiliser production. Implementation timelines, eligibility verification and the rollout window for the third-season urea pricing have not yet been published.
