The Government has sought to clarify that it does not intend to bring back price controls on non-urea fertilisers.
“We don’t want controls back, but want that the subsidy provided by the Government reaches farmers for whom it is intended”, a Department of Fertilisers official told Business Line .
The latest moves, he claimed, were only part of a mechanism to arrive at reasonable pricing of fertilisers, “for which the industry is being consulted”.
According to him, fertiliser companies had voluntarily agreed to lower their MRPs in line with the declining trend in global prices of potassic and phosphatic nutrients in recent months.
“Some have been selling DAP and MOP at the agreed lower prices of Rs 22,500 and Rs 16,000 a tonne respectively. But there are also others who haven’t been doing so, which amounts to undue profiteering”, the official added.
The problem this time was also compounded by the Government’s late announcement of the NBS rates applicable on various nutrients.
In the previous years, the subsidy rates were announced before the beginning of new fiscal.
However, for 2013-14, it was delayed by a month, by which time, the companies had already started bagging their products with the MRPs of the last rabi season printed on them.
In fact, Finance Minister P. Chidambaram, while announcing the new rates on May 1, had said that the Fertiliser Department will put in place a mechanism to ensure that manufacturers fix the lower MRPs to reflect the decline in global prices.
“If there is any violation or contravention, there will be a monitoring mechanism to ensure that the benefit of lower prices is passed on to farmers,” Chidambaram had then noted.