India’s DAP Shortage and Fertiliser Policy Challenges

India is currently facing a critical shortage of Diammonium Phosphate (DAP), a vital fertiliser for its agricultural sector. This situation marks the urgent need for a comprehensive overhaul of the country’s fertiliser policy. The reliance on imports, particularly from China, poses risks to food security. Experts assert that boosting domestic production is essential to mitigate these risks.

Current Context of DAP Shortage

The DAP crisis is exacerbated by geopolitical tensions and supply chain disruptions. India’s imports of DAP from China have drastically decreased, falling by nearly 75% in the first half of FY25 compared to the previous year. The Israel-Hamas conflict has also obstructed crucial shipping lanes, complicating fertiliser deliveries. Farmers in key agricultural states, including Punjab and Haryana, struggle to access adequate DAP supplies for their crops.

Impact of Rising Prices

DAP prices have surged , increasing from $515 per tonne in May 2024 to $642 per tonne by October 2024. This price volatility has adversely affected the fertiliser industry and farmers. The rising costs have compounded the financial burden on farmers, who are often forced to pay above the government-fixed price for DAP.

Domestic Production and Self-Sufficiency Goals

Despite advancements in urea production, India remains heavily reliant on imported fertilisers. Approximately 60% of DAP needs are met through imports. The government aims to reduce this dependency by commissioning new production units, targeting a reduction of import reliance to below 15% by FY26. Currently, India’s DAP production is insufficient to meet domestic demand.

Government Response and Subsidy Issues

The Government of India has taken steps to address the DAP shortage by proposing long-term agreements with suppliers and promoting alternative fertilisers. However, farmers report inadequate supplies and higher prices. The fertiliser subsidy for 2024-25 has been reduced, raising concerns about its impact on agricultural productivity. Farmers argue that the delayed subsidy announcements have created challenges for private suppliers.

Alternative Fertilisers and Future Considerations

While alternatives to DAP, such as NPKS complex fertilisers and Muriate of Potash (MOP), are available, they do not provide the same nutrient profile. Experts warn that these substitutes may not fully compensate for the phosphorus content crucial for crops like wheat and mustard. Farmers may need to adapt to using these alternatives to mitigate potential production losses.

Need for Policy Reassessment

The ongoing DAP shortage signals a pressing need for India to reassess its fertiliser policy. Stakeholders emphasise the importance of aligning domestic production capabilities with the evolving global supply chain landscape. Ensuring timely access to essential fertilisers is critical for sustaining agricultural productivity.

Questions for UPSC:

1. Examine the implications of India’s reliance on fertiliser imports for its food security.
2. Discuss the role of government subsidies in shaping the agricultural landscape of India.
3. Critically discuss the impact of geopolitical tensions on global supply chains and food security.
4. Analyse the effectiveness of alternative fertilisers in addressing the nutrient needs of crops in India.

Answer Hints:

1. Examine the implications of India’s reliance on fertiliser imports for its food security.

1. India imports approximately 60% of its DAP needs, making it vulnerable to supply chain disruptions.
2. Over-reliance on imports, especially from China, risks food security amidst geopolitical tensions.
3. Insufficient domestic production capacity exacerbates the dependency on volatile global markets.
4. Farmers face challenges in accessing adequate fertilisers, impacting crop yields and food production.
5. Long-term strategies must prioritize boosting domestic fertiliser production to ensure food security.

2. Discuss the role of government subsidies in shaping the agricultural landscape of India.

1. Government subsidies are designed to stabilize fertiliser prices and support farmers’ affordability.
2. Subsidy reductions can lead to increased costs for farmers, affecting their financial stability and productivity.
3. The fertiliser subsidy allocation is critical for maintaining agricultural output and food security.
4. Delayed subsidy announcements can disrupt supply chains and deter private suppliers from engaging effectively.
5. Effective subsidy policies must balance financial support for farmers with the sustainability of the fertiliser industry.

3. Critically discuss the impact of geopolitical tensions on global supply chains and food security.

1. Geopolitical tensions, such as the Israel-Hamas conflict, disrupt crucial shipping lanes affecting fertiliser imports.
2. Trade restrictions from key suppliers like China create shortages in essential inputs for agriculture.
3. Unpredictable global supply chains can lead to price volatility, impacting farmers and food production costs.
4. Countries heavily reliant on imports face heightened risks to food security during geopolitical crises.
5. Resilience in supply chains is essential for maintaining agricultural productivity amid global uncertainties.

4. Analyse the effectiveness of alternative fertilisers in addressing the nutrient needs of crops in India.

1. Alternatives like NPKS and MOP provide a mix of nutrients, but lack the phosphorus content of DAP.
2. While they may help mitigate some nutrient deficiencies, they do not fully replace DAP’s role in crop growth.
3. Farmers report that alternatives are often more expensive and less effective, complicating their adoption.
4. Successful integration of alternatives requires education and support for farmers to adjust practices.
5. Research into developing cost-effective substitutes with similar nutrient profiles is crucial for sustainability.