Balanced Fertilisation Policy

Context:

In a significant development, urea consumption reached a historic high of 35.8 million tonnes (mt) by the conclusion of the fiscal year ending in March 2024. This figure represents a notable 16.9% increase compared to the 30.6 mt recorded in 2013-14. Consequently, it is anticipated that achieving balanced fertilization will emerge as a pivotal policy objective for the incoming government post the Lok Sabha elections.

Relevance:

GS III: Agriculture

Dimensions of the Article:

1. Balanced Fertilisation Policy
2. Nutrient-Based Subsidy (NBS) System

Balanced Fertilisation Policy:

• Encourages farmers to avoid excessive application of urea, di-ammonium phosphate (DAP), or muriate of potash (MOP), which contain primary nutrients in high concentrations.
• Likely to be a key policy goal for the government post Lok Sabha elections.

Urea Consumption Trends:

• Fiscal year ending March 2024 witnessed record urea consumption of 35.8 million tonnes (mt), a 16.9% increase from 2013-14’s 30.6 mt.
• Consumption of urea, containing 46% nitrogen (N), initially declined during 2016-17 and 2017-18.
• Decline attributed to mandatory neem oil coating of all urea since May 2015.

Neem Coating Rationale:

• Aimed to curb illegal diversion of highly-subsidised urea for non-agricultural purposes.
• Non-agricultural uses include plywood, dye, cattle feed, and synthetic milk production.
• Neem oil acts as a mild nitrification inhibitor, facilitating gradual nitrogen release.
• Improved nitrogen use efficiency reduces urea bags required per acre.
• Despite compulsory neem-coating, and the government reducing the bag size from 50 to 45 kg in March 2018, the consumption of urea has only gone up during the last six years (see table).

Nutrient-Based Subsidy (NBS) System:

• Instituted in April 2010 by the previous United Progressive Alliance (UPA) government.
• Aims to promote balanced fertilisation by fixing a per-kg subsidy for nitrogen (N), phosphorus (P), potassium (K), and sulphur (S) in fertilisers.
• Links the subsidy on fertilisers to their nutrient content, encouraging the use of complex fertilisers with balanced proportions of nutrients.

Challenges Associated with NBS:

• Excludes urea from subsidy, leading to increased consumption due to controlled maximum retail price (MRP).
• Restoration of price controls on non-urea fertilisers has worsened nutrient imbalances.
• Discrepancies in MRP among fertilisers incentivize over-application of urea and underutilization of other nutrients.
• Lack of proper pricing hierarchy among non-urea fertilisers exacerbates nutrient imbalances.

Opportunities for Improvement:

• India’s heavy dependence on imported fertilisers necessitates measures to rationalize costs and reduce subsidy burdens.
• Recent drops in global prices of urea, DAP, and MOP provide an opportunity for the government to rationalize MRPs of fertilisers.
• Potential to mitigate the impact of urea price hikes by increasing subsidy rates on other nutrients and promoting balanced plant nutrition.
• Introduction of sulphur-coated urea presents an opportunity to address nutrient imbalances and promote balanced fertilisation.
• Expectation of further initiatives to promote balanced fertilisation in the coming months.

-Source: Indian Express