The correct option is C Both a and b
Nostoc, Anabaena and Oscillatoria are cyanobacteria. Cyanobacteria is a prokaryote (single celled microorganism without well defined nucleus) that fixes atmospheric nitrogen. Hence, it increases the organic matter of the soil through photosynthetic activity.
Cyanobacteria are the autotrophic microorganisms (since they have photosynthetic pigment chlorophyll) that are widely distributed both on land and water. Hence, it increases the organic matter of the soil by fixing atmospheric nitrogen. As a result of which the soil fertility is increased. This helps farmers to use them as biofertilizers.
Nostoc, Anabaena and Oscillatoria are free-living nitrogen fixing bacteria. They fix the atmospheric nitrogen in the soil.
Nostoc is a free living cyanobacteria. It forms colonies in the soil and helps in fixing the atmospheric nitrogen to the soil and thus increases the organic matter of the soil.
Anabaena is both free living and has a symbiotic association with Azolla. Anabaena is found growing along rice plantations, thus helping in nitrogen fixation in rice cultivated agricultural lands. It is found in association with Azolla, a fern, which provides shelter to Anabaena in its leaf cavities. Anabaena-Azolla is used as an important biofertilizer in the paddy fields.
Oscillatoria is a filamentous free living cyanobacteria that helps in fixing the atmospheric nitrogen to the soil enhancing organic matter of the soil.
Farmers prefer to use such biofertilizers to enrich the soil nutrient (nitrogen) content instead of chemical fertilizers. Chemical fertilizers are more hazardous in the long run and biofertilizers are more safe.