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The Tamil Nadu Government has urged the Centre to withdraw the Nutrient-Based Subsidy policy and revert to the earlier system of controlled pricing.
The Tamil Nadu Chief Minister, Ms J. Jayalalithaa, has written to the Prime Minister, Dr Manmohan Singh, to withdraw the prevailing subsidy system, which has resulted in a steep increase in fertiliser prices for farmers.
She also requested Dr Singh to direct the Fertiliser Ministry to allocate to the State the entire quantity of fertiliser that it needs.
Under the Nutrient Based Subsidy scheme, fertiliser manufacturers and importers are free to fix the sale price of fertilisers based on the costs.
Fertiliser prices have gone up two or three times under this scheme.
Since April 2012, the retail price of a 50 kg bag of Diammonium Phosphate (DAP) has increased to Rs 1,200 from Rs 910; and Muriate of Potash (MOP) to Rs 840 from Rs 231.
The price of complex fertiliser, 10:26:26 has increased to Rs 1,110 from Rs 374 and that of 20:20:0:13 to Rs 858 from Rs 327.
For the current year, the Fertiliser Department has reduced the subsidy on DAP to Rs 14,350 from Rs 19,763 last year and for MOP to Rs 14,400 from Rs 16,054.
It is also considering further cuts in subsidy and a 10 per cent hike in urea prices are also envisaged, the Chief Minister said.
The State Government has absorbed some of the impact of the price hike by doing away with the 4 per cent VAT on fertilisers and pesticides from July 2011.
However, the Centre which dictates the policy has to support the farmers to make agriculture remunerative.
Tamil Nadu needs 28 lakh tonnes of fertilisers annually. Timely supply of adequate quantity is a concern.
There was a shortfall of 1.1 lakh tonnes of MOP for the ‘kharif’ season in 2011 and short supply of 33,967 tonnes of DAP and 1.37 lakh tonnes of urea during the `samba’ season (August-November) 2011.
The State Government had taken timely steps to enable foodgrains production of 103.85 lakh tonnes in 2011-12.
Fertiliser supply continues to be “dismal in the current financial year also,” she said.
The DAP requirement for April to May was 48,000 tonnes but fertiliser firms supplied 20,603 tonnes, which is less than half the quantity needed. In June, the allocation of DAP was just 23,000 tonnes against the requirement of 30,000 tonnes.
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