Data from the Department of Fertilisers shows a 3.7 per cent increase in the sale of urea during April-October 2022 over the corresponding seven months of the previous year.
- Even higher, at 16.9 per cent, has been the growth in di-ammonium phosphate or DAP sales.
Key points
- High government subsidies are behind the low pricing, and high sales, of these two fertilisers.
- The resulting nutrient imbalance owing to their use — disproportionate to other, more expensive fertilisers — could have implications for soil health, ultimately affecting crop yields.
- The use of nitrogen (N), phosphorous (P) and potassium (K) in the country has over the last few years sharply deviated from the ideal NPK use ratio of 4:2:1.
- The high subsidy on urea and DAP makes them much cheaper for farmers relative to other fertilisers.
- The maximum retail price (MRP) of urea is currently fixed at Rs 5,628 per tonne. Companies are obliged to sell at this administered price, with their higher cost of production or imports being reimbursed as subsidy by the Centre.
- The other fertilisers are technically “decontrolled” since April 2010, with the Centre only paying a fixed per-tonne subsidy to ensure “reasonable levels” of prices.
- The government has, in recent times, and especially with the global price surge post the Russia-Ukraine war, practically brought back even these fertilisers under the control regime.
- This reflects in their pricing. Companies do not sell DAP at more than Rs 27,000 per tonne, and the MRPs are similarly set at Rs 34,000 per tonne for MOP, Rs 29,000-31,000 per tonne for NPKS complexes and Rs 11,000-11,500 per tonne for SSP.
- In the event of charging more, companies run the risk of their subsidy payments being denied, withheld or delayed.
- The Union Government has also brought Potash Derived from Molasses (PDM) under Nutrient Based Subsidy (NBS) scheme for the first time since its inception in 2010 to give a push to its manufacturing by Sugar Mills as a byproduct. This Fertilizer is known as PDM-0:0:14.5:0.
(Source: Indian Express)
