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Indian Economy

Fertiliser Self-Sufficiency

  • 14 Jul 2021
  • 5 min read

Why in News

Recently, the Minister of Chemicals and Fertilisers has reviewed the initiatives of the Department of Fertilisers for making India Atmanirbhar in Fertilisers.

  • The Government is planning to liberalise Market Development Assistance (MDA) policy to promote the use of alternative fertilisers.

Key Points

  • MDA Policy:
    • MDA policy was earlier limited to city compost only.
    • There were demands to expand this policy by incorporating organic waste like Biogas, Green Manure, organic compost of rural areas, solid/liquid slurry, etc.
    • This expansion will fully complement the Swachh Bharat Abhiyan.
  • Government Initiatives and Schemes:
    • Neem Coating of Urea:
      • The Department of Fertilizers (DoF) has made it mandatory for all the domestic producers to produce 100% urea as Neem Coated Urea (NCU).
      • The benefits of use of NCU are as under:-
        • Improvement in soil health.
        • Reduction in usage of plant protection chemicals.
        • Reduction in pest and disease attack.
        • An increase in yield of paddy, sugarcane, maize, soybean, Tur/Red Gram.
        • Negligible diversion towards non-agricultural purposes.
        • Due to slow release of Nitrogen, Nitrogen Use Efficiency (NUE) of Neem Coated Urea increases resulting in reduced consumption of NCU as compared to normal urea.
    • New Urea Policy (NUP) 2015:
      • Objectives of the policy are-
        • To maximize indigenous urea production.
        • To promote energy efficiency in the urea units.
        • To rationalize the subsidy burden on the Government of India.
    • New Investment Policy- 2012:
      • The Government announced New Investment Policy (NIP)-2012 in January, 2013 and made amendments in 2014 to facilitate fresh investment in the urea sector and to make India self-sufficient in the urea sector.
    • Policy on Promotion of City Compost:
      • The Government of India approved a policy on promotion of City Compost, notified by the DoF in 2016 granting Market Development Assistance of Rs. 1500/- for scaling up production and consumption of city compost.
      • To increase sales volumes, compost manufacturers willing to market city compost were allowed to sell city compost in bulk directly to farmers.
      • Fertilizer companies marketing city compost are covered under the Direct Benefit Transfer (DBT) for Fertilizers.
    • Use of Space Technology in Fertilizer Sector:
      • DoF commissioned a three year Pilot Study on “Resource Mapping of Rock Phosphate using Reflectance Spectroscopy and Earth Observations Data” by National Remote Sensing Centre under ISRO, in collaboration with Geological Survey of India (GSI) and the Atomic Mineral Directorate (AMD).
    • The Nutrient Based Subsidy (NBS) Scheme:
      • It has been implemented from April 2010 by the DoF.
      • Under NBS, a fixed amount of subsidy decided on an annual basis, is provided on each grade of subsidized Phosphatic & Potassic (P&K) fertilizers depending on its nutrient content.
      • It aims at ensuring the balanced use of fertilizers, improving agricultural productivity, promoting the growth of the indigenous fertilizers industry and also reducing the burden of Subsidy.

Fertilizer Consumption in India

  • India’s fertiliser consumption in FY20 was about 61 million tonnes — of which 55% was urea—and is estimated to have increased by 5 million tonnes in FY21.
    • Since non-urea (MoP, DAP, complex) varieties cost higher, many farmers prefer to use more urea than actually needed.
    • The government has taken a number of measures to reduce urea consumption. It introduced neem-coated urea to reduce illegal diversion of urea for non-agricultural uses. It also stepped up the promotion of organic and zero-budget farming.
    • Currently, the fertiliser production of the country is 42-45 million tonnes, and imports are at around 18 million tonnes.
  • Subsidy on Urea: The Centre pays subsidy on urea to fertiliser manufacturers on the basis of cost of production at each plant and the units are required to sell the fertiliser at the government-set Maximum Retail Price (MRP).
  • Subsidy on Non-Urea Fertilisers: The MRPs of non-urea fertilisers are decontrolled or fixed by the companies. The Centre, however, pays a flat per-tonne subsidy on these nutrients to ensure they are priced at “reasonable levels”.
    • Examples of non-urea fertilisers: Di-Ammonium Phosphate (DAP), Muriate of Potash (MOP).
    • All Non-Urea based fertilisers are regulated under Nutrient Based Subsidy Scheme.

Source: PIB

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