Panel raises questions over rise in P&K fertiliser prices

Echoing an industry demand to focus on balanced use of fertilisers, a Parliamentary panel has urged the Centre to tackle rising prices of phosphatic and potassic (P&K) fertilisers and recommended higher domestic production of low-cost indigenous fertilisers.

“The fact remains that prices of P&K fertilisers have gone up sharply under the Nutrient Based Subsidy (NBS) regime, which is one of the reasons for unbalanced use of fertilisers by the farmers as they have gone for less costly urea,” the Parliamentary Standing Committee on Chemicals and Fertilisers said in its 16th report, submitted to the Lok Sabha on Wednesday.

The price of urea is capped at ₹5,360/tonne with the difference in cost of production and retail cost paid out to manufacturers as subsidy.

For P&K fertilisers like Di-ammonium Phosphate (DAP) and Muriate of Potash (MOP), the subsidy has been fixed for the current fiscal year at ₹12,350/tonne and ₹9,300/tonne, respectively.

The retail price of Di-ammonium Phosphate is ₹22,000-24,000/tonne and it is around ₹16,500/tonne for Muriate of Potash.

The committee did not share the ministry’s view that the only way to reduce non-plan expenditure — largely subsidies — was to reduce Nutrient Based Subsidy rates since this would push prices of P&K fertilisers up and hurt consumption.

“The Fertiliser Department being the nodal authority, cannot simply ignore its responsibility to ensure supply of fertilisers to farmers at affordable prices and also its balanced utilisation by farmers in order to check degradation of soil,” the panel said under Recommendation 4 in the report.

The way forward is to increase production of low-cost indigenous fertilisers to reduce the subsidy burden, it suggested.

The Fertiliser Association of India (FAI) has pitched for P&K fertiliser makers to be treated on par with urea manufacturers, particularly with regard to gas supply.

“Gas must be supplied to all P&K units as it is required for balanced use of fertilisers. The soil needs various nutrients and micronutrients beyond just nitrogen through excessive urea usage,” said Satish Chander, Director General, FAI, speaking a few days before the submission of the Parliamentary panel report.

The statement followed the Delhi High Court’s order to the Centre last week to resume gas supply to Deepak Fertilisers and Petrochemicals’ plant in Maharashtra. Supply to the plant had been stopped last May.

It ordered the government to unveil a comprehensive policy for gas allocation within six weeks, to be implemented uniformly.