India’s agriculture sector has been grappling with the challenge of improving productivity and quality enabling it to be competitive in international markets for decades, despite possessing one of the largest acreages under cultivation in the world. Notably, the share of agriculture in India’s GDP has declined from 35 per cent in 1990-91 to 15 per cent in 2022-23, primarily due to rapid growth in the industrial and service sectors outpacing agricultural production.

The Ministry of Agriculture estimates that the total foodgrain production in the country reached a record high of 3.2 billion tonnes in 2023. This is an increase of 140.71 million tonnes compared to the production achieved in the last fiscal year. To feed a rising population of over 1.40 BN, food security concerns are pushing the farm input sector to continuously innovate and seek improvements in ease of doing business in India.

Assessing the needs

One of the underlying reasons for this disparity is the limited availability of advanced crop nutrition tailored to meet the diverse nutritional needs of various crops. Unlike countries such as the United States or Brazil, which have successfully integrated innovative fertilizers into their agricultural practices, India struggles to adopt similar advancements due to regulatory constraints, hurdles in the licensing process.

On one hand, the bulk category of fertilizers, which are highly subsidized by the government, caters to the basic nutritional requirements of crops but often falls short in providing targeted nutrition for optimal growth and yield. On the other hand, speciality fertilizers, crucial for ensuring nutritional sufficiency and maximizing crop productivity, face stringent regulations that impede their introduction into the Indian market. This disparity not only limits the potential for agricultural innovation and efficiency but also undermines the competitiveness of Indian farmers in global trade. As a result, India grapples with subpar yields despite possessing the necessary resources and potential for growth. Subpar yields limit the returns to the farmers as well as hinder the export of agri-products in a sustainable manner.

The current landscape underscores the urgent need for reform in the fertilizer registration process to foster innovation and competitiveness in Indian agriculture. Streamlining regulatory procedures and incentivizing research and development, shall unlock the full potential of India’s agricultural sector and pave the way for sustainable growth. However, addressing these challenges requires a multifaceted approach that bridges the gap between regulatory frameworks, scientific research, and the practical needs of farmers on the ground.

The World Bank Doing Business 2019 report ranked India at 77 considering notable reforms introduced by the government during the 2017-2020 period. Under its National Trade Facilitation Action Plan 2017-2020, India implemented several initiatives that improved the efficiency of cross-border trade, reducing border and documentary compliance time for both exports and imports. But this isn’t enough to promote better agricultural production. Especially in the fertilizer industry, the stringent orders, and requirements under the Fertilizer Control Order (FCO) mean that it takes way longer to register fertilizer in India than the rest of the world thus, not incentivising research and innovation to create new products.

Promoting specialised solutions

To enhance fertilizer output and efficiency, several strategies can be implemented. Firstly, incorporating products like micro-nutrient -coated fertilizers can significantly increase efficiency and utilization of subsidised fertilizers. Studies have shown that micronutrients coated onto bulk fertilizers have led to higher yields, suggesting a potential reduction in subsidy reliance as farmers achieve better and more efficient results with less subsidised fertiliser consumption.

The Government should consider issuing a guideline for general specifications of all fertilisers which specifies the minimum nutrient and maximum contaminants – such a step will go a long way to reduce the time taken to allow innovative products to be made available to the Indian farmers.

In 2014, such a guideline was issued for introduction of Water-Soluble Fertilisers in India increasing the choices with farmers and also reducing the time for new innovative products to less than 60 days as compared to over 800 days being taken earlier. This also has had an impact on increasing fertigation acreages and helping farmers produce better quality crop with reduced resources.

Digitising applications for registration streamline processes, ensuring quicker approvals and facilitating the introduction of innovative fertilizers into the market. By embracing these suggestions, the fertilizer industry can witness significant improvements in output and effectiveness, ultimately benefiting both farmers and the agricultural sector.

Conclusion

While government schemes and subsidies provide relief to farmers, there is an imperative need to provide new generation an innovative plant nutrition especially in fertiliser sector which is not subsidised as the bulk segment. Fast tracking and incentivising launch of newer crop nutritional products in the market will be instrumental in increasing productivity and uplifting economic status of these small-holder farmers in India.

The author is Managing Director, Yara South Asia

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