FAI discuss fertilizer industry issues in India
Dec. 4, 2019
It is important to mention that the government spends a sum of Rs 70,000 crore towards fertilizer subsidy annually.
Farmers normally purchase fertilizers only twice a year — during Kharif and Rabi crop seasons. As a result, there is a gap of 6 to 8 months between the manufacture of the fertilizers and the purchase by the farmer, he said. “If earlier the company was paying Rs 50 per tonne as interest charges to the bank, now it pays anywhere between Rs 600 to 800 per tonne,” said Satish Chander, Director General, Fertilizer Association of India during an interaction with the media on the eve of FAI Annual Seminar 2019.
The payment due to fertilizer companies was calculated based on the receipt of material in the district. Now, with the introduction of DBT, this goalpost has been shifted to point of sale,” said Satish Chander.
According to FAI, a total of Rs 33,691 crore dues are pending as on November 1. Out of this, Rs 20,853 crore is under the DBT, and Rs 12,838 crore dues are outside the DBT.
The increase in working capital requirement and consequent increase in interest cost due to implementation of DBT is yet to be recognized in the urea policy. Urea units cannot recover this cost from farmers through increased MRP because MRP is fixed by the Government. Subsidy comprises 78 percent of cost of urea, Chander further added.
More from AgroNews
Subscribe to daily email alerts of AgroNews.