The meeting of the group of ministers (GoM) looking into issues such as the sustainable use of fertilizers, apart from fertilizer pricing and subsidy, has approved some of the main suggestions made by the fertilizer ministry in its presentation on Friday.
“The GoM has approved the short-term measures for improving the fertilizer productivity. The GoM will sit again to discuss the long-term measures which require further deliberation,” said a senior official in the agriculture ministry, who did not wish to be named.
The GoM is headed by agriculture minister Sharad Pawar and includes finance minister P. Chidambaram, minister for chemicals and fertilizers Ram Vilas Paswan and deputy chairman of the Planning Commission, Montek Singh Ahluwalia.
“The two main short-term measures include giving top priority in providing gas to the fertilizer sector and introducing fertilizers fortified with a coating of secondary nutrients like zinc or boron and so on. The additional cost of fortification will be passed on to the farmers,” confirmed a senior fertilizer ministry official, who too asked not to be identified.
Fortified fertilizers are value-added fertilizers which add to the soil’s nutrient content.
The official also added that the priority was to first convert all the fertilizer manufacturing plants which use naphtha or furnace oil as feedstock into gas-based units. Out of the 28 functional urea plants in the country, 12 use naphtha or furnace oil as feedstock.
Fertilizer industry experts welcomed the move. “Broadly speaking, naphtha costs around $18 (Rs171) per million British thermal units(mBtu) against natural gas, for which the fertilizer industry currently pays around $3.9 per mBtu. So, the GoM’s decision will have a considerable impact in lowering the production cost,” said a senior official of industry body Fertilizer Association of India (FAI), who sought anonymity.
“The move to introduce fortified fertilizer is a step in the right direction. Now manufacturers will be able to provide the appropriate nutrient coating to the basic fertilizer products, depending on the soil requirement. This will not only improve soil health but also increase the soil productivity,” the FAI official said.
But several major issues are still pending.
The most prominent among them include the shift towards a nutrient-based subsidy regime and providing subsidy directly to farmers. “The Planning Commission has also recommended that the states may be persuaded to share the subsidy burden of the government either equally or in any reasonable proportion,” said a senior official close to the development, who did not wish to be identified. The government’s fertilizer subsidy bill has increased from Rs15,879 crore in 2004-05 to an estimated Rs48,000 crore in the current fiscal year.
The GoM on fertilizer was constituted to work out a way of moving towards a system that provides balanced plant nutrition without adversely affecting the soil. Since 1966-67, fertilizer consumption directly impacted foodgrain productivity, which rose from 644kg/ha to the present level of 1,700kg/ha in 2007-08. However, during the last decade, foodgrain productivity has remained constant despite a 40% increase in fertilizer use.