What is the issue?
- Urea is getting to be the most consumed and heavily import-dependent fertiliser.
- It is thus essential to achieve self-sufficiency in this sector by boosting domestic production and curbing its superfluous consumption.
What are the government efforts?
- Production - A New Urea Policy was launched in 2015 focussing specifically on maximising domestic output, promoting energy efficiency in production and rationalising subsidies.
- It offered incentives to fertiliser units to produce more than their reassessed capacities.
- Supplementary measures like allowing few plants to continue production using naphtha as feedstock till they get assured gas supply were taken.
- A new gas pooling policy has been put in place to supply gas to all urea units at uniform rates.
- Curbing extravagant use - Unregulated use of urea and diversion to non-agricultural activities are getting to be concerns for crops and the environment.
- The governmental measures in this regard include:
- Neem-coating of urea - to be applied in relatively smaller doses to get the same crop yields; also, it is unfit for non-farm use.
- Smaller Packages - packing of urea in 45 kg bags, instead of usual 50 kg, to economise on its use because number of bags per hectare is the count for farmers.
- Soil health cards - to recommend the laboratory test-based exact doses of different fertilisers needed for each farm holding.
What are the outcomes?
- Flawed official policies and inordinate delays in subsidy reimbursement to the industry kept fresh investments in abeyance.
- However, a series of reform-oriented steps in the last few years have altered the investors’ outlook on urea.
- Notably, annual growth rate of indigenous production is optimistic and imports are also shrinking.
- Furthermore, the government and public sector fertiliser units are planning to spend on renovation and modernisation of existing plants and revival of closed fertiliser factories.
- Despite these positive outcomes, there is a need to bring urea under the nutrient-based subsidy regime.
- This is essential to ensure a balanced use of the three major plant nutrients (nitrogen, phosphate and potash) to maintain soil fertility.
Source: Business Standard
