BIOFERTILIZER, instead if you use it; it would compete with the plants.Nostoc fixes atmospheric nitrogen into ammonia, which may then be used or converted to a form suitable for plant growth.The free-living forms we investigated desiccate during times of dry weather and REHYDRATE to photosynthesize and fix nitrogen.Thus demonstrating Nostoc's potential as a sustainable biofertilizer.Hence option 2 is correct. Bio-Fertilizers and Their Use in AgricultureFor a sustainable agriculture system, it is essential to use RENEWABLE inputs (fertilizer, pesticides, water etc.) which can benefit the plant and cause no or MINIMAL damage to the environment.One of the energy-efficient and pollution-free method is to exploit the ability of certain microorganisms like bacteria, algae and fungi to fix atmospheric nitrogen, solubilize phosphorus, decompose organic material or oxidize sulphur in the soil.When they are applied to the soil, they enhance the growth and yield of crops, improve soil fertility and reduce pollution.They are known as “biofertilizers”.Thus bio-fertilizers are living or biologically active products or microbial inoculants of bacteria, algae and fungi (separately or in combination) which are able to enrich the soil with nitrogen, phosphorus, organic matter etc.