Incentivizing Domestic Production of Fertilizers
A study was got conducted on the impact of Nutrition Based Subsidy (NBS) Policy by Department of Fertilizers through M/s Ernst & Young. Some of the important findings/recommendations are as under:
(i) Overall subsidy burden from P&K fertilizers has declined.
(ii) The availability of P&K fertilizers has improved.
(iii) There has been significant increase in prices payable by farmers for P&K fertilizers.
(iv) The consumption of DAP and MOP has declined. However, it has increased significantly for SSP.
(v) Significantly low price of Nitrogen has led to increase in gap between prices of N vis-a-vis P&K, thus resulted in the imbalanced use of Fertilizers.
(vi) The MRPs of P&K fertilizers must be reasonable and to secure supplies of P&K fertilizers, strategic investment should be made by the Indian players in mines abroad by creating ‘sovereign fund’.
Department of Fertilizers had received twelve proposals for setting up of Revamp, Expansion, Revival and Greenfield plants based on the New Investment Policy (NIP) - 2012. Interest shown by the project proponents has been noted by the Department of Fertilizers. The project proponents have been directed to furnish the required Bank Guarantee to the Department of Fertilizers after securing financial closure for the project but will before finalization of the LSTK/EPCA contractor.
The final Cabinet Committee on Economic Affairs (CCEA) Note to amend the NIP-2008 and to establish a Unified Pricing Formula in order to incentivize domestic production of urea beyond re-assessed capacity from existing urea units which have taken revamp under NIP-2008 has been sent to CCEA for approval.
Department of Agriculture assesses requirement of fertilizers every cropping season and for this purpose, organizes Zonal Conferences before every cropping season. Requirement of fertilizers depends upon cropping pattern, cropped area, requirement of nutrients in soil as per soil health status and recommended doses, irrigated area, consumption pattern and accordingly States make an initial projection based on these factors. Thereafter, requirement is finalized in Zonal Conferences in consultation with Stakeholders namely States, Department of Fertilizers, Lead Fertilizer Suppliers and Fertilizer Association of India (FAI) etc.
This information was given by the Minister of State for Chemicals & Fertilizers Shri Hansraj Gangaram Ahir in reply to an unstarred question in the Rajya Sabha today.