Lok Sabha Question No. 2633 (UNSTARRED), answered on 2016-05-10
Subject: Price Structure of Chemicals
Ministry: CHEMICALS AND FERTILIZERS
Asked by: M. K. RAGHAVAN

## GOVERNMENT OF INDIA MINISTRY OF CHEMICALS AND FERTILIZERS DEPARTMENT OF FERTILIZERS

## LOK SABHA

## UNSTARRED QUESTION NO. 2633

TO BE ANSWERED ON

: 10.05.2016

## Price structure of chemicals

## 2633  SHRI M.K. RAGHAVAN:

Will the Minister of CHEMICALS AND FERTILIZERS be pleased to state:

- (a) whether there is highly distorted price structure of chemicals like nitrogen, potassium etc. which  is  imbalancing  damaging  the  fertility  and  breeding  efficacy  in  the  agriculture sector;
- (b) whether subsidised urea is being smuggled to neighbouring countries and is being used for non agriculture purposes; and
- (c) if so, the details of the measures being taken to ensure that fertilizers like urea reach the farmers at competitive cost and in time?

## ANSWER

MINISTER OF STATE IN THE MINISTRY OF CHEMICALS AND FERILIZERS

## (SHRI HANSRAJ GANGARAM AHIR)

(a): Yes  Madam.  Department  of  Fertilizers  (DoF)  has  been  implementing  Nutrient  Based Subsidy (NBS) w.e.f 01.04.2010 under which a fixed amount of subsidy is provided on each grade of Nitrogen 'N', Phosphorus 'P' and Potassium 'K' fertilizers based on its nutrient content. The amount of subsidy to be given is  arrived  at  based  on  international  and  domestic  prices, exchange rate and inventory  of fertilizers  in  the  country.  Fertilizers  companies  are  free  to  fix Maximum  Retail  Price  of  P&K  fertilizers  based  on  the  market  dynamics.  However,  these companies are required to fix MRP at reasonable level. Urea is provided to the farmers at a statutory  price  of  Rs.  5360/-  per  MT  which  is  relatively  cheaper  than  the  Nitrogenous  P&K fertilizer. This is one of the major reported reasons for farmer's preference for using excessive urea leading to imbalance in fertility and breeding efficacy in agriculture sector. However, Soil Health Card scheme of the Government is aimed at correcting the imbalance in fertilizer use.

(b): Government  has  declared  fertilizer  as  an  essential  commodity  under  the  Essential Commodities  Act,  1985  and  notified  Fertilizer  Control  Order,  1985  and  Fertilizer  (Movement Control) Order, 1973. The State Governments have been empowered to take appropriate action to  curb  black-marketing of fertilizers  and  initiate action  against the  persons  who  violate  these orders.  Department  of  Fertilizers  has,  from  time  to  time,  written  to  the  Chief  Secretaries  of various States and ministry of Home Affairs to activate the enforcement agencies under their jurisdiction to take appropriate action to curb black-marketing.  State  Governments  are responsible for ensuring availability of all subsidized chemical fertilizers to farmers at subsidized rates.  However, during the current year, there is no report of black-marketing from any State Government so far.

(c): Under  NBS,  a  fixed  amount  of  subsidy  is  provided  on  each  grade  of  Phosphatic  and Potassic fertilizers  based on its nutrient content. The fertilizer companies are free to fix MRP based on the market dynamics. However, Government keeps a check on the reasonableness of MRP. In case of Urea, the price is statutorily fixed by the Government.

Department  of  Fertilizers  ensures  availability  of  fertilizers  at  the  state  level  and  the distribution  to  the  farmers  within  the  State  at  printed  Maximum  retail  Price  (MRPs)  is  the responsibility of the State Governments.

The following steps are being taken by the Governments to make available Chemical fertilizers (Urea, DAP, MOP & NPK) in time to the farmers:

- (i) The  movement  of  all  major  subsidized  fertilizers  is  being  monitored  throughout  the country by an on-line web based monitoring system (www.urvarak.co.in) also called as Fertilizer Monitoring System (FMS);
- (ii) The  State  Governments  are  regularly  advised  to  coordinate  with  manufacturers  and importers of fertilizers for streamlining the supplies through timely placement of indents for railway rakes through their state institutional agencies like Markfed etc.
- (iii) Regular weekly Video Conference is conducted jointly by Department of Agriculture & Cooperation (DAC), Department of Fertilizers (DoF) and Ministry of Railways with State Agriculture Officials and corrective action are taken to dispatch fertilizer as indicated by the State Governments.

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