Seeds of crisis in shortage of fertilizers

Seeds of crisis in shortage of fertilizers
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First Published: Tue, Jun 10 2008. 11 53 PM IST
Updated: Tue, Jun 10 2008. 11 53 PM IST
Bangalore / New Delhi: The shortage of fertilizers ahead of planting of the kharif, or summer, crop has triggered a violent response from farmers in at least two states, and could, if not addressed soon, create more problems for the ruling Congress-led United Progressive Alliance government in a year when several key states go to the polls.
The shortage of fertilizers, if it persists, could translate into a fall in agricultural output. This couldn’t have happened at a worse time because food price inflation is high and is likely to stay that way for at least some time. Any decline in farm output would result in a further spike in food prices.
The standing committee of Parliament (which comprises members of Parliament from various parties, and which discusses policy-related issues) on chemicals and fertilizers, which has the right to review administrative decisions of the ministry, has called for a special meeting on Thursday to discuss the crisis.
A protest in Karnataka’s Haveri district resulted in the death of one farmer and injuries to several others. In Latur in Maharashtra, a group of farmers were baton-charged by the police, according to the Loksatta newspaper dated 10 June. There have been reports of a shortage in Bathinda in Punjab too, but there have been no reports of protests.
Politicians and experts attribute the shortfall in fertilizer supply to several reasons, including a disruption in freight movement due to the ongoing Gujjar agitation in Rajasthan, a cutback in production and supplies by fertilizer firms on account of non-payment of subsidies by the government and, in the case of Karnataka, opportunistic politics to embarrass the Bharatiya Janata Party government during its first week in office.
The domestic shortage coincides with a global scarcity of fertilizers. Last month, China agreed to pay triple what it did a year ago for potash. From Canada to the Philippines, fertilizer prices are up, in part because most are made by energy-intensive processes and, consequently, track the price of fuel. A Wall Street Journal story, carried in Mint on 27 May, said farmers are finding it difficult to expand their harvests in response to the global food crisis that has sparked rioting, rationing and export controls in many countries.
India consumes 48 million tonnes, or mt, of fertilizers of which 14mt are imported.
In Karnataka, farmer group Karnataka Rajya Raitha Sangha’s president Kodihalli Chandrashekar claimed a farmer died due to police firing, while the superintendent of police of Haveri, M. Nanjundaswamy, claimed that a stampede by a rampaging mob was responsible for this.
“There was a shortage last year too, but this year, it is glaring,” said B. Ingin, a farmer leader in the state.
“It is new (for farmers to turn violent) in the state. There is (an) external hand behind this,” said B.S. Yeddyurappa, the newly elected chief minister of Karnataka, who replaced the senior-most bureaucrat overseeing agriculture in the state on Monday. “Undue panic has led to artificial scarcity,” a spokesperson for the chief minister added, hinting at a conspiracy by the opposition.
In response, Congress spokesperson Manish Tiwari said: “We really do not know whether the chief minister of Karnataka, merely seven days after taking oath, would have been able to get a grip of what is really happening on the field, especially since he is travelling and prostrating at the feet of every godman he comes across...”
However, a Delhi-based individual associated with the fertilizer industry said one could not rule out some amo-unt of “political motivation”.
“What happened yesterday coincided with the first day of the Karnataka assembly under the new government, and the first question the government was asked was about fertilizer shortage,” this person said.
Fertilizers are of three main types—nitrogen, potash and phosphate. In India, the government fixes the price at which fertilizers are sold; it also pays manufacturers the difference between this and their cost of manufacture plus a fair return which is higher.
Mint reported on 30 May that the increase in production costs of fertilizers on account of soaring crude prices had begun to squeeze margins of domestic fertilizer firms and this would see the government’s subsidy burden touch an estimated Rs95,000 crore in 2008-09, 1.9% of India’s gross domestic product.
Some analysts, meanwhile, say a shortage had been anticipated but a supply response did not materialize. “It was known that only 70% of the supply was being met,” said J.H. Kulkarni, vice-chancellor of the University of Agriculture Sciences in Dharwad.
A senior official at the department of fertilizers, who did not wish to be identified, claimed there was no shortage of fertilizer, even in Dharwad.
However, Anant G. Geete, a Shiv Sena member of Parliament and also chairman of standing committee, said a fertilizer shortage isn’t unusual: “Fertilizers are often in short supply and this seems to be the case now as well. There is usually a shortfall of urea, for example, during the monsoon,” said Geete.
raghu.k@livemint.com
Udit Misra and Ashish Sharma in New Delhi, Bajinder Pal Singh in Chandigarh and Reuters contributed to this story.
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First Published: Tue, Jun 10 2008. 11 53 PM IST
More Topics: Fertilizers | Farmers | Crop | UPA | Karnataka |