New Delhi: In a move to promote the balanced use of fertilizers and reduce the overuse of urea, the government on Monday cut retail prices of non-urea based fertilizers by up to Rs.5,000 per tonne.
Major public sector companies producing fertilizers have decided to reduce the retail price of diammonium phosphate (DAP) by Rs.2,500 per tonne and muriate of potash (MOP) by Rs.5,000 per tonne, fertilizer minister Ananth Kumar said, adding that private companies have also agreed to bring down prices.
State-run fertilizer firms Rashtriya Chemicals and Fertilizers (RCF) and National Fertilizers Ltd (NFL), as well as private firm Indian Potash Ltd (IPL), have agreed to reduce the price of non-urea fertilizers, he said.
Kumar further said that the government has ensured that there is no shortage of fertilizers in the country, and the latest move to reduce prices of non-urea based fertilizers will translate into a savings of Rs.4,500 crore for farmers.
The decision was taken following a meeting with leading manufacturers where the ministry emphasized the need to transfer the benefits of reduced input costs in producing fertilizers to farmers.
The farmer-friendly move from the centre comes on the back of a decision to make 75% of urea produced in the country neem-coated to prevent diversion for industrial use. Further, the government has, since 2014, been running a soil health card scheme to promote balanced fertilizer use.
Farmers in India tend to overuse urea, which is heavily subsidized in comparison to other fertilizers. While annual domestic consumption of urea is over 30 million tonnes (mt)—about a quarter of it is imported—use of DAP and MOP is around 10 mt and 2.5 mt, respectively.
On an average, farmers apply double the amount of urea as compared to prescribed norms, and in some states like Punjab, Haryana and Rajasthan, 10-15 times more than the requirement. The result is a declining response of crops to fertilizer use—the amount of foodgrain produced per kg of fertilizer applied declined from around 13kg in the 1970s to less than 4kg by 2010, according to data from the fertilizer ministry.
After the price cut, while DAP will cost Rs.22,000 per tonne, MOP will retail at Rs.11,000 per tonne. They are still costlier than urea, which costs Rs.5,360 per tonne.
The Union budget in February marginally reduced fertilizer subsidies from Rs.72,438 crore in 2015-16 (revised estimate) to Rs.70,000 crore in 2016-17.