Fertilizer is defined as any organic or inorganic substance, natural or artificial supplying one or more of the chemical elements/nutrients required for plant growth. A Subsidy allows an individual to buy a product or use a service at a lower price than its market cost.

PRESENT CHALLENGES

• The total demand for urea in the country is about 34-35 million tonnes (mln t) whereas the domestic production is about 25 mln t.
• The international prices of fertilizers are volatile and almost directly proportional to energy prices. Besides, cartels of major global producers have a strong influence on prices. These extraordinary price rises are on account of a sharp upsurge in international energy prices and supply constraints in major producing countries due to robust domestic demand, production cuts and export restrictions. This also coincides with the peak demand for the Rabi season. This is likely to create serious fiscal challenges.

THE WAY FORWARD

• Self-reliant and not depend on import of fertilizers
• Five urea plants at Gorakhpur, Sindri, Barauni, Talcher and Ramagundam are being revived in the public sector.
• Extend the NBS model to urea and allow for price rationalisation of urea compared to non-nitrogenous fertilizers and prices of crops
• Present system of keeping the price of urea fixed and absorbing all the price increases in subsidy needs to be replaced by distribution of price change over both price as well as subsidy based on some rational formula.
• Develop alternative sources of nutrition for plants
• Shift towards the use of non-chemical fertilizers as well as a demand for bringing parity in prices and subsidy given to chemical fertilizers with organic and biofertilizers.This also provides the scope to use a large biomass of crop that goes waste and enhance the value of livestock byproducts
• Pay attention to improving fertilizer efficiency through need-based use rather than broadcasting fertilizer in the field. The recently developed Nano urea by IFFCO shows promising results in reducing the usage of urea.