The Indian Minister of Chemicals and Fertilisers has recently reviewed the initiatives of the Department of Fertilisers in an effort to make India self-reliant, or Atmanirbhar, in Fertilisers. This includes plans to liberalise the Market Development Assistance (MDA) policy to endorse the use of alternative fertilisers.
Understanding the MDA Policy
The MDA policy was formerly restricted to city compost alone. Nevertheless, there were increasing demands to enhance this policy by including organic waste like Biogas, Green Manure, organic compost of rural areas, and solid/liquid slurry. Such an expansion will be in complete accord with the Swachh Bharat Abhiyan, a nation-wide cleanliness campaign.
Government Initiatives and Schemes
Under the Department of Fertilizers (DoF), it’s obligatory for all domestic producers to manufacture 100% Neem Coated Urea (NCU). The benefits of using NCU range from improving soil health, reducing usage of plant protection chemicals, decreasing pest and disease attack, and boosting yield of various crops. Additionally, it results in negligible diversion towards non-agricultural purposes and enhances Nitrogen Use Efficiency (NUE).
New Urea Policy (NUP) 2015 and New Investment Policy 2012
NUP 2015 aimed at maximizing indigenous urea production, promoting energy efficiency in urea units, and alleviating the subsidy load on the Government of India. The government, under NIP-2012, announced amendments in 2014 to encourage fresh investment in the urea sector with the goal of making India self-sufficient in the field.
Policy on Promotion of City Compost
The DoF instituted the policy on promotion of City Compost, in 2016, which allowed the sale of city compost in bulk directly to farmers. Fertilizer companies marketing city compost fall under the Direct Benefit Transfer (DBT) for Fertilizers.
Use of Space Technology in Fertilizer Sector
The DoF initiated a pilot study on ‘Resource Mapping of Rock Phosphate using Reflectance Spectroscopy and Earth Observations Data’ conducted by the National Remote Sensing Centre under ISRO, in partnership with Geological Survey of India (GSI) and the Atomic Mineral Directorate (AMD).
Nutrient Based Subsidy (NBS) Scheme
Implemented from April 2010, the NBS Scheme provides a fixed sum of subsidy every year on each grade of subsidized Phosphatic & Potassic (P&K) fertilizers depending on its nutrient content. It aims at ensuring balanced use of fertilizers, boosting agricultural productivity, fostering the growth of the indigenous fertilizers industry and reducing the subsidy burden.
Fertilizer Consumption in India
In FY20, India’s fertilizer consumption was approximately 61 million tonnes — 55% of which was urea— and is presumed to have risen by 5 million tonnes in FY21. Due to higher costs of non-urea types, many farmers choose to use more urea than actually necessary. Government measures have been implemented to reduce urea consumption, including the introduction of neem-coated urea to curb illegal diversion of urea for non-agricultural uses, and increased promotion of organic and zero-budget farming.
Subsidy on Urea and Non-Urea Fertilisers
The Indian government provides a subsidy to fertilizer manufacturers on urea based on the cost of production at each plant. These units must then sell the fertilizer at a government-regulated Maximum Retail Price (MRP). Additionally, a flat per-tonne subsidy is given on non-urea fertilisers to ensure they are priced at “reasonable levels”, with the MRPs of such fertilisers being decided by the companies themselves. Non-urea based fertilisers regulated under Nutrient Based Subsidy Scheme include Di-Ammonium Phosphate (DAP) and Muriate of Potash (MOP).
Last Modified: February 15, 2024