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.
