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Delay in Indian urea deregulation distorts use of fertliserqrcode

Jul. 10, 2012

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Jul. 10, 2012

Delay in Indian urea deregulation distorts use of fertliser

The idea of ushering in balanced use of vital plant nutrients through the nutrient-based fertiliser subsidy regime (NBS) has come to a near halt due to the Indian inordinate delay in deregulation of urea.

Farm experts and economists believe this has pushed the country to the days when urea (which majorly contains nitrogen) was the most popular plant nutrient. This could have a serious impact on the nutrient balance in soil and an indirect impact on the crop production. Nitrogen makes plants bigger and greener, but does little to improve yield, while its balanced use along with potassium and phosphorus is the best way to improve crop yields.
 
Earlier, the fertiliser ratio was heavily skewed in favour of urea because of the massive subsidy it enjoyed. Currently, a vast price difference between its counterparts — di-ammonia phosphate (DAP) and muriate of potassium (MOP) — has titled the balance in favour of urea.
 
A paper presented at a seminar of the Fertiliser Association of India showed the nitrogen-phosphorus-potassium (NPK) ratio in the country was 10:4:1 in 2011-2012. Ideally, this should be 4:2:1 for a healthy soil structure.
 
Prior to NBS regime, the ratio was heavily skewed in favour of nitrogen because of the unabashed use of urea. April 2010, the nutrient consumption ratio was at 4.6:2:1, while in 2010-11, the ratio witnessed wider distortion at 4.7:2.3:1.
 
The government decided to embark on a nutrient-based fertiliser subsidy regime in April 2010 with the twin objective of correcting the growing imbalance in soil, pushed by excessive use of urea and to bring down its annual subsidy bill, by making the prices more market-linked.
 
While it may have achieved relative success in the first, that is to bring down the fertiliser subsidy burden, it has miserably failed on the other, to usher in a balanced regime.
Between 2009-10 and 2012-13, the government's annual fertiliser subsidy dropped from Rs 61,264 crore to Rs 60,974 crore, according to Budget documents.
 
From March 2010, the government raised the price of urea by 9.9 per cent, while companies raised the price of DAP and MOP by a staggering 157 per cent and 282 per cent, respectively.
 

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