The new nutrient-based fertiliser subsidy policy provides implicit incentives to farmers to test soil samples regularly and get crop-wise recommended doses of nutrients, and offers prospective benefits from the agro-environmental management point of view. A study of six villages in the lower Bhavani Basin in Tamil Nadu reveals that despite a strong willingness on the part of farmers to adopt agricultural best management practices, inadequate infrastructure and the high transaction costs involved in accessing such services make them reluctant to test soil samples regularly. This paper looks at the institutional, infrastructural and agronomic factors influencing farmers’ willingness, and concludes that the new policy needs to be supplemented with basic agricultural extension services through public-private partnerships.