Fertilizer Sector in India

Introduction

Fertilisers are substances that are applied to soil or plants to supply essential nutrients required for optimal growth and development. These nutrients, such as nitrogen, phosphorus, and potassium, are crucial for plants to carry out various metabolic processes, including photosynthesis, protein synthesis, and cell division. Fertiliser use is widespread in agriculture, horticulture, and gardening to enhance crop yields and improve plant health. 

Important Facts on Fertiliser Industry in India

• The second largest consumer of urea after China. 
• Second in the production of Nitrogenous Fertiliser.
• One of eight core industries. 
• The second biggest subsidy after food. 
• Demand for Potash is met through imports.

Usage of Fertilisers in India

• Deficiencies in India: Indian soils generally have low organic carbon content and widespread nitrogen deficiency. 
  • Phosphorus and potassium levels are typically low to medium, while sulfur deficiencies have emerged gradually.
• Rapid Growth: Fertiliser consumption has increased from less than 1 million tonnes of total nutrients in the mid-1960s to almost 17 million tonnes in recent times. 
  • The introduction of high-yielding varieties in the 1960s boosted Fertiliser use.
• Import Dependency for Fertilisers: India’s dependency on import at present is to the extent of 25% of our requirement of Urea, 90% in the case of Phosphates and 100% in case of Potash.
• Disparities in Fertiliser Consumption: The intensity of Fertiliser consumption varies greatly from region to region.
  • Example:  40.5 kg/ha of total nutrients in Rajasthan to 184 kg/ha in Punjab.
  • Urea accounts for 82 percent of total nitrogen consumption 
  • Di-ammonium phosphate for 63 percent of phosphate consumption.
• Sales / consumption of different Fertilisers substantially increased during 2019-20 as compared to 2018-19.
  • Urea increased by 5.29%
  • DAP increased by 15.67%
  • MOP increased by 3.45%
  • NPKS increased by 9.95%
• Organic Manures Use:  Make a significant contribution to the supply of plant nutrients and soil fertility. 
• Dominant Crops: Rice, wheat, cotton, sugar cane, rapeseed and mustard consume about two-thirds of the Fertiliser applied. 

Fertiliser Subsidy Mechanism In India

• In India fertiliser subsidy mechanism is administered as per the government schemes; 
  • Ammonia, which is an input of urea, is produced from natural gas; 
  • Sulphur, which is a raw material for phosphoric acid fertiliser, is a by-product of oil refineries [UPSC 2020].  
• Farmers buy fertilisers at MRPs (maximum retail price) below their normal supply-and-demand-based market rates or what it costs to produce/import them.
• Urea Fertilisers:
  • The MRP of neem-coated urea, for instance, is fixed by the government, whereas its average cost-plus price payable to domestic manufacturers and importers is around 4 to 5 times of the MRP. 
  • The difference, which varies according to plant-wise production cost and import price, is footed by the Centre as subsidy.
• Non-Urea Fertilisers:
  • The MRPs of non-urea fertilisers are decontrolled or fixed by the companies.
  • The Centre, however, pays a flat per-tonne subsidy on these nutrients to ensure they are priced at reasonable levels.

How is the subsidy paid?

• Beneficiaries: The subsidy goes to fertiliser companies, although its ultimate beneficiary is the farmer who pays MRPs less than the market-determined rates. 
  • Companies, until recently, were paid after their bagged material had been dispatched and received at a district’s railhead point or approved godown.
• Direct Benefit Transfer (DBT): This system was introduced in 2018, wherein subsidy payment to the companies would happen only after actual sales to farmers by retailers.
• DBT in Fertiliser: 
  • Each retailer now has a point-of-sale (PoS) machine linked to the Department of Fertilisers’ e-Urvarak DBT portal. 
  • Anybody buying subsidised fertilisers is required to furnish his/her Aadhaar unique identity or Kisan Credit Card number. 
  • The quantities of the individual fertilisers purchased, along with the buyer’s name and biometric authentication, have to be captured on the PoS device. 
  • Only upon the sale getting registered on the e-Urvarak platform can a company claim subsidy.                                                  

Fertiliser Related Schemes 

• Pradhan Mantri Kisan Samrudhi Kendra (PMKSK): It will cater to the needs of the farmers in the country and provide agri-inputs (Fertilisers, seeds, implements) including testing facilities for soil, seeds and Fertilisers. 
  • These Kendras will also help create awareness among the farmers. 
  • Retail fertiliser shops in the country will be converted into PMKSK in a phased manner
• Pradhan Mantri Bhartiya Jan Urvarak Pariyojana: ALso known as the One Nation, One Fertiliser is an initiative of the Ministry of Chemicals & Fertilisers.
  • Aims to implement One Nation One Fertiliser by introducing Single Brand for Fertilisers and Logo.
  • Single Brand Name for UREA, DAP, MOP and NPKs etc. would be BHARAT UREA, BHARAT DAP, BHARAT MOP and BHARAT NPK etc.
  • Through the initiative the farmer gets rid of all kinds of confusion about the quality of the fertiliser and its availability.
  • Example: Now the urea sold in the country will be of the same name, same brand and same quality and this brand is Bharat.
• Bharat brand
  • It Indicates Fertiliser subsidy scheme namely Pradhanmantri Bhartiya Janurvarak Pariyojna will be used on said Fertiliser bags. 
  • Fertiliser Companies are advised not to procure old designed bags w.e.f 15.09.2022. 
  • The new bags under One Nation One Fertiliser concept will be introduced w.e.f Agust 02, 2022.
• Nutrient Based Subsidy (NBS)
  • The Scheme was initiated in the year 2010.
  • Implemented by the Department of Fertilisers
  • Applicable to 22 Fertilisers (other than Urea).
  • To provide Fertilisers to the farmers at subsidized prices based on the nutrients (N, P, K & S) present.
  • Fertilisers that are fortified with secondary and micronutrients such as molybdenum (Mo) and zinc are given additional subsidy
  • Subsidy on Phosphatic and Potassic Fertilisers (P&K): is announced by the Government on an annual basis for each nutrient on a per kg basis.
  • Intends to increase the consumption of P&K Fertilisers so that optimum balance (N:P:K= 4:2:1) of NPK fertilization is achieved
• Market Development Assistance Policy: To promote the use of alternative Fertilisers like  Green Manure, organic compost of rural areas, solid/liquid slurry.
• Soil Health Card: Report cards are given to all farmers at an interval of 2 years; implemented by the Ministry of Agriculture and Farmers welfare.
• • The cost of sampling; testing and reporting → by the Central Government. 
  • Village-level soil testing labs will be set up by youth having education in agriculture, SHGs, FPOs etc. 
  • It provides two sets of Fertiliser recommendations for six crops including recommendations of organic manures and recommendations for additional crops on demand. Soil samples are tested with respect to 12 parameters:
  • Macronutrients: Nitrogen (N), Phosphorus (P), Potassium (K)
  • Secondary nutrient: Sulphur (S); Micronutrients: Zinc (Zn), Iron (Fe), Copper (Cu), Manganese (Mn), Boron (B). 
  • Micronutrients: Zinc (Zn), Iron (Fe), Copper (Cu), Manganese (Mn), Boron (B) 
  • Physical parameters: pH, EC (electrical conductivity), OC (organic carbon)

Conclusion

• Chemical Fertiliser use in India has seen significant growth over the years, driven by the need to improve agricultural productivity. 
• However, challenges such as regional disparities in consumption, import dependency for certain nutrients, and concerns over soil fertility depletion persist. 
• Efforts to promote balanced nutrient application, enhance domestic production, and ensure efficient subsidy distribution are crucial for sustainable agricultural development in India.

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