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Rethink NPK FERTILIZERqrcode

Jul. 25, 2022

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Jul. 25, 2022

In regular parlance we see the trend to club NPK as PRIMARY fertilizers, CMS as SECONDARY fertilizers and other minerals as MICRONUTRIENTS. Silica is also classified under Micronutrients, though I have a difference of opinion there. Saving the discussion over Silica for some other day.


Carbon, Hydrogen & Oxygen are classified as Macronutrients but not as fertilizers. By and large we understand that plant takes Carbon, Hydrogen and Oxygen comes from Water & Air. So that line is clear and we can call them as ELEMENTARY Fertilizers consumed naturally.


I am avoiding much discussion around Carbon. Thanks to the sustainability groups discussion for driving discussion around Carbon. Agriculture industry normally limits itself to carbon content in soil and how to improve it. Carbon is the soul of soil. Leaving that discussion for the other forums.


What confuses me is why is N clubbed with P & K ?


Let us consider Farming as a Corporation looking for business restructuring. FERTILIZERS being their main raw material. There is a single team looking into the procurement. Business is under cost pressure and wants to optimize their raw material consumption.


The current structure always handles it in a single group. Should be keep them clubbed together as FERTILIZERS and continue or should we form a team to break them up into different entities and change the approach?


If I am the CEO of that CORPORATION, I would propose to spinoff Nitrogen (N) as an independent item to study and optimize. I will present my case to the board with the following arguments .


#1. Nitrogen, after Carbon, is the second largest component. I am assuming a dry basis calculation taking out water out of the equation.


#2. Nitrogen forms almost 65% of the total fertilizer volume followed by Phosphorous 25% and Potash less than 10%.


#3. We are surrounded by Nitrogen gas and it is possible to fix Nitrogen from air directly. This is unlike P & K which are elements and cannot be captured from thin air. So, they pose different problems and different solution.


#4. Nitrogen offers yet another perspective. While we consume energy to manufacture Nitrogen fertilizer, we waste a lot of it back in the atmosphere. This provides us a lot of opportunity to optimize. Sustainability matrix now wants to limit the release of Nitrogen and it may trigger lot of farmer protests similar to Netherland protests.


#5. Excess Nitrogen fertilizer attracts a lot of Pest & Disease attacks. So Nitrogen deficiency as well as over supply, both are a problem. Such problems are normally not associated with P & K.


Scientific studies has showed that 30-50% reduction in uses of Nitrogen fertilizers can be comfortably achieved with some tweaks in farm practices without expecting an over night transition in practices. This can translate to may be a 25% reduction in fertilizer usage. Not a bad target to start with.


So, from the management perspective it is a fit case to spin it off as an independent subject to bring the focus. Hence the recommendation.


If you are the CEO, what would you suggest?


If you represent the Board of Directors, what will be your suggestion to the CEO?


Source: LinkedIn

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