Why does India require a new fertiliser policy?

  • A new fertiliser policy is expected from the government.
  • The NITI Aayog has already established a task force to investigate the production and promotion of bio-fertilizers and organic fertilisers.

How much fertiliser is consumed in India?

  • Between April and mid-December 2022, total fertiliser consumption was 40.146 million metric tonnes (mmt), with 32.076 mmt produced and 12.839 mmt imported.
  • The demand-supply gap is filled through timely imports.

How is the availability of fertilisers monitored?

  • Some of the steps taken by the government to improve fertiliser availability include: monthly assessment of state-specific requirements; 100% neem coating of urea, which increases nutrient efficiency; monitoring of crop yield and soil health; and online monitoring of fertiliser movement via the integrated Fertilizer Monitoring System.

Impact of the current policy

  • Substantial subsidies: This has prompted many farmers to use chemical fertilisers such as urea, which increases productivity but reduces soil fertility in the long run.
  • Excessive and inefficient fertiliser use: According to a UN report, this results in nutrient losses to the environment, as well as the contamination of drinking water and the impact on human lives as a result of unsafe storage practises.
  • Emission source: With the subsidy being distributed directly to businesses, technology-inefficient businesses are protected, resulting in carbon emissions.
  • While attempts to reform the fertiliser policy have been made, they have had to be reversed due to pressure from various sources.

Government spending trends

  • Food subsidies: The government has increased food, fertiliser, and fuel subsidies by nearly 70%.
  • Increased spending: For 2023-24, the fertiliser ministry may seek a 2.5 trillion subsidy – the outlay for FY23 has already surpassed 2 trillion.
  • Import bill increases: Because Russia is a major exporter of liquefied natural gas, a critical input in the production of urea, prices have risen.

Actions taken in 2022

  • DBT implementation: The fertiliser department distributed urea and nutrient-based subsidies and implemented direct benefit transfer.
  • One Nation, One Fertilizers (ONOF) Scheme: It also implemented the ONOF scheme, which aims to ensure fertiliser supply on time.
  • Model fertiliser retail outlets: Existing fertiliser retail outlets at the village, block/sub district/taluk, and district levels are being converted into model fertiliser retail outlets.

Way ahead

  • Promoting local fertilisers: A lower duty on imported phosphoric acid could be proposed to increase the competitiveness of local fertiliser manufacturers, as well as an incentive to promote organic fertilisers.
  • Bio-fertilizers and organic fertilisers: The NITI Aayog has already established a task force on bio-fertilizers and organic fertilisers.
  • Limiting large subsidies: Given the long-term interests of agriculture and the effects of using inorganic fertilisers, saving a significant amount on subsidy support is a positive step.
And get notified everytime we publish a new blog post.