Tuesday, October 22, 2019
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MSC (MicroSave Consulting) releases nationally representative findings of the Direct Benefit Transfer in Fertilizer (DBT-F) program

Correspondent (Delhi) MSC (MicroSave Consulting)—a global consulting firm that works in financial, social, and economic inclusion—revealed the results from a nationally representative study of the Direct Benefit Transfer in Fertilizer (DBT-F) program. Undertaken in 2018, the objective of the study was to examine the field implementation of DBT-F closely, evaluate system efficiency, identify challenges, and provide actionable solutions.

MSC had conducted four rounds of evaluation on the request of the National Institute for Transforming India (NITI) Aayog and the Department of Fertilizers (DoF). We evaluated DBT-F from 2016—during the pilot phases up until 2018—when the program rolled out nationwide. For the nationally representative study, MSC conducted quantitative research with 1,182 retailers and 11,281 farmers across 18 states and 54 districts in the country. Furthermore, MSC undertook intensive qualitative interviews with other stakeholders to gain a holistic view. These stakeholders included district government officials (District Agriculture Officers and Block Agriculture Officers), fertilizer company representatives (Lead Fertilizer Suppliers and others), state coordinators, and district consultants.

Mitul Thapliyal, Partner and LeaderGovernment and Social ImpactMSC said: “DBT-F is one of the fastest implemented DBT programs in the country. The endeavor works to boost transparency by tracking the movement, requirement, availability, and sale of fertilizer in real-time. Farmers prefer the new system because it has improved the availability of fertilizer and reduced instances of overcharging. The DBT-F platform now allows the government to think about the next set of reforms to promote balanced use of fertilizer and helps it to make the fertilizer distribution process more efficient.”

Under this program, the government remits the subsidy to fertilizer companies only after retailers have sold the fertilizer to farmers through Aadhaar-based authentication. Retailers can also use the Aadhaar-enrolment ID along with the Kisan Credit Card (KCC) or Electoral Photo ID Card (EPIC) to authorize the sale if a farmer has not yet received an Aadhaar number after enrolling for it. Unlike the previous system, where the government paid the subsidy after production and dispatch of fertilizer, farmers under the DBT-F system may purchase any quantity of subsidized fertilizer regardless of the land size they possess or cultivate.

Major findings from the study:

  • Instances of manual sales without Aadhaar and “adjusted” transactions fell from 21% in the third round of evaluation to 13.0% in the current round. Adjusted transactions are those that retailers often undertake without verifying the farmers’ credentials, only to update their records later. The retailers adjusted transactions when a farmer’s Aadhaar was not available at the time of fertilizer purchase or in cases where the Aadhaar authentication failed. Moreover, retailers often did not ask farmers for their Aadhaar number to purchase fertilizer and simply sold it by manually adjusting the transactions later. The primary reason for this was to minimize transaction time during peak sales periods.
  • Among Aadhaar-authenticated transactions, 86.6% were successful on the first attempt. Overall, successful Aadhaar authentication in three attempts increased to 99.0% in the current round from 97% in the third round of evaluation.
  • The average time it takes for a transaction through Point of Sale (PoS) devices improved from four to five minutes in the third round of the evaluation to three to four minutes in the current round. The government had increased the server capacity by deploying new servers to improve the transaction time.
  • Retailer training and awareness efforts that the DoF and fertilizer companies undertook are laudable. Of the total retailers surveyed, 90.0% received at least two training sessions. Of these retailers, 83.1% stated that the training was sufficient to understand the features and operations of the PoS device.

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