Farmers in India have purchased 80 per cent of the estimated monthly demand of urea in the first three weeks of August against 70 per cent in di-ammonium phosphate (DAP), 56 per cent in complex (combination of N, P, K nutrients) and 38 per cent in Muriate of Potash (MoP). This brings to focus the pricing policy followed by the government making urea the cheapest, even lower than edible salt.
Currently, urea is sold to farmers at Rs 267/bag (of 45 kg) while DAP’s MRP is not allowed to rise above Rs 1,350/bag (of 50 kg) under government control. However, prices of MAP/MoP are between Rs 1,700 and Rs 2,200 per bag (of 50 kg) and those of complex of various combinations are available at Rs 1,500-2,650 per bag (of 50 Kg). Some of the complex fertilisers coated with zinc and other micro-nutrients cost more than Rs 2,650 per bag (of 40 kg).
According to latest sales data for August 1-21, urea consumption was 30.6 lakh tonnes (lt), that of DAP was 6.8 lt, MOP 1.2 lt and complex 8.5 lt. The government had estimated demand for entire August at 38.01 lt of Urea, 9.81 lt of DAP, 3.27 lt of MOP and 15.27 lt of complex.
Rationalise prices
Industry experts said that the only way to change the skewed use of fertilisers and correct the soil fertility is to rationalise retail prices of all fertilisers even if subsidy continues. “If you sell urea at lower than even salt purchased by common man, there is bound to be distortion. The industry has been requesting the government to start raising urea MRP in small lots and Uttar Pradesh has supported such a move,” a CEO of a leading urea manufacturer said.
There is no justification to continue fixing urea bag at Rs 267 while majority of farmers are purchasing at higher rates, many at about Rs 300/bag, he said.
The government has started a pilot on linking fertiliser sales with land records of farmers in 56 districts in 22 states (as on July 31) whereas the target is to cover 80 districts. However, a pan India roll out will depend on views of states as recently the Madhya Pradesh government had to suspend the App-based slot booking after farmers protested against the new rule stipulating cap on purchases.
Positive feedback
It is broadening a nationwide digital platform that tracks fertiliser from production to retail sale, adding tools to link purchases with individual farmers’ land records and to monitor subsidy payments more closely, the fertiliser ministry said August 30.
“Feedback from pilots is majorly positive. However, there are issues like QR code not getting generated, mapping of exact retail shops, correct mapping of Agristack data and non functioning of App. We are working to address the challenges,” an official said adding there is no inconvenience for farmers as offline sales facilities are also concurrently available.
The pilot is being executed phase wise, its nationwide roll out will be decided on a much later stage, if agreed by all the stakeholders, he said.
The Framework for Fertilizer Sale (FFS) is aimed at integrating a Mobile App-based fertilizer booking system with the existing iFMS Point of Sale (PoS) ecosystem. The Integrated Fertilizer Management System (iFMS) tracks more than 14 crore Aadhaar-linked buyers and over 2,50,000 retailers, and processes about 70 million tonnes (mt) of fertilizer sales a year. The system underpins roughly ₹2 lakh crore in annual fertilizer subsidies.