Fertilizers in India

Why in the News?

The Standing committee of Parliament on chemicals and Fertilizers has asked the govt. to ensure fertilizer availability and increase the local production.

Observations of the Panel:

1. There is a deficit of 119 lakh tonnes of fertilizers comparing the overall production and consumption of fertilizers in India.
2. There is a shortage of fertilizers in some of the states in India.
3. The GST for fertilizers is 5% while GST for raw materials such as sulphuric acid and ammonia is 18% which is inappropriate.
4. The price of Urea has been under control due its exclusion from the Nutrient based Subsidy scheme.

The recommendations of the committee:

1. End the import dependence on fertilizers such as urea, Diammonium Phosphate (DAP), Muriate of Potash (MOP) and nitrogen, Phosphorus and Potassium (NPK).
2. Ensure the availability of fertilizers in every state by taking corrective measures.
3. Increase the local production of fertilizers through investments from public and private fertilizer manufacturers.
4. Review of the Nutrient-Based subsidy scheme (NBSS) is required to
   1. have price control of all fertilizers (Urea is outside the NBS scheme).
   2. Remove the disincentives for farmers to use other fertilizers.
5. The GST on raw materials of fertilizer production should be kept to a minimum to support the fertilizer manufacturers and the farmers.

About:

Fertilizers:

A fertilizer is a natural or artificial substance containing the chemical elements that improve growth and productiveness of plants. The chemical substances shall include elements such as Nitrogen, Phosphorous and Potassium.

The basic fertilizers used in India includes:

1. Urea
2. Diammonium Phosphate (DAP)
3. Muriate of Potash (MOP)
4. Nitrogen, Phosphorus and Potassium (NPK).

Govt. schemes and policies related to fertilizer production in India:

1. Urea subsidy scheme
   1. Urea is sold at statutorily notified uniform MRP exclusive of charges towards neem coating and taxes as applicable 
   2. The urea subsidy is given to the manufacturer directly and not the farmer.
   3. The difference between the delivered cost of urea at farm gate and net market realization by the urea units is given as subsidy to the urea manufacturer/importer by the Government of India.
   4. Thus, all farmers are being supplied urea at the subsidized rates
2. Nutrient Based Subsidy Scheme:
   1. The non-Urea fertilizers such as Diammonium Phosphate (DAP), Muriate of Potash (MOP) and nitrogen, Phosphorus and Potassium (NPK and Potash Derived from Molasses (PDM) are covered under the NBS scheme.
   2. The scheme also includes a freight subsidy for promoting indigenous production of fertilizers.
   3. Direct Benefit Transfer (DBT) has been rolled out for fertilizer subsidy payment with a view to improve fertilizer service delivery to farmers. 
3. Integrated Fertilizer Monitoring System (iFMS) to monitor the movement of all major subsidized fertilizers throughout the country 
4. Nano Urea
   1. Nano Fertilizers hold great promise for application in plant nourishment because of the size-dependent qualities, high surface-volume ratio and unique optical properties.
   2. Nano fertilizer releases plant nutrients in a controlled manner contributing to higher nutrient use efficiency.
5. One Nation One Fertilizer
   1. Single Brand for Fertilizers and Logo under Fertilizer subsidy scheme namely “Pradhan Mantri Bhartiya Janurvarak Pariyojna” (PMBJP).
   2. Helps in increasing the availability basket of fertilizers
   3. Dilemma among farmers in choosing from plethora of brands available in the markets
   4. Ensures timely supply of fertilizers.

Link: House panel tells government to ensure fertilizer availability, increase local production - The Hindu