The fertilizer woes and a few good steps.
An unlikely contributor to the country’s current account deficit is the chemical fertilizer that’s used the most in India. No prizes for guessing it right, it is Urea. Yeah, we need to import a whopping 87.49 lakh tonnes of Urea every year and end up importing close to 80 lakh tonnes.
Call it improper and illogical use of the chemical fertilizers, call it the ignorance of the farmers, call it the lack of awareness about the good agricultural practices in the country, call it anything you want but the harsh reality in this country is that the urea consumption is going up by 9-10% every year.
While the demand is growing at an enormous pace, the ones in power did little to improve the production in the last 10
years. While we are producing 2.20 Crore tonnes of urea per annum we would need at least 3.5 crore tonnes to meet the demands of our farmers. Thus, the imports. Here we ought to remember that we are not able import all the Urea we want, we can buy only the quantity that is available in the market. This is impacting the farmer and we see long queues of farmers who are fighting it out to get the required amount of the fertilizer.
Let us now look at the costs involved, It costs India Rs. 19000 to import a tonne of Urea. So when we are importing close to 80 lakh tonnes you know the amount of foreign exchange you are spending on this one alone. Now, when we import Urea at that price, we cannot ask our farmer to pay that price can we ? That would break his back and would kill his livelihood once for all. So we give to our farmer at Rs. 5360 and the differential 13640 is born as subsidy by the government. This subsidy itself is costing the governments huge money in thousands of crores.
Manufacturing Urea is not rocket science and for a nation that is already manufacturing 2.20 crores could have added the capacity to produce more. we can only blame the directionlessness of the previous regimes for the crisis of the day. The ten years of UPA rule did not give us any new plants, did not increase the capacity of the existing plants to the optimal level and thus brought more trouble to nation.
The first good steps in this regard are being taken now, the current NDA government is trying to approach this problem with a two pronged strategy.
One, they want to increase the production of Urea in the country by one crore tonnes in the next 5 years. They are investing 60 thousand crores to build 4 new Urea plants in Maharashtra, Assam, Madhya Pradesh and Karnataka. Some 7 months ago the Modi Sarkar has given the go ahead to revitalize the factories in Ramgundam, Talcher, Barauni and Gorakhpur.
The second one is where the government wants to create more awareness for the farmers with respect to the usage of chemical fertilizers, the government wants to educate the farmers about the ill effects of using excessive fertilizers and aims to reduce the amount of chemical fertilizers used by the farmers.
The strategy of the government looks good, they want to increase the produce and decrease the consumption thus making India a Urea surplus state. This looks good on paper but has is own operational issues. For example, the Urea plants need good amount of Natural gas to produce Urea. The big challenge for the government now is to find out the ways and means in which this Gas can be provided to these plants. Given the dependency of Petroleum exports this indeed is a humongous task. Then, creating awareness and reducing the usage of Urea is not at all easy. The cash trapped farming community wants bigger yields and they would be extremely reluctant to let go of fertilizer that ensures them the yields. It remains to be seen as to how the government and its will prevail over these problem and help the farmer of the nation.
I am happy that the Modi sarkar has taken the much needed first steps in the long journey to make India a Urea surplus nation. I sincerely hope that the vision becomes a reality and the farmer of the nation is happy.
Source : I relied heavily on an editorial column that appeared in Eenadu. (The largest circulated Telugu news paper). Here is the link. http://eenadu.net/Editorial/Sampadakeeyaminner.aspx?item=Sampadakeeyamtl This was the editorial of the that news paper on 5th May 2015.
Here is a related report on The Hindu.