Relevance : GS 3(Agriculture and Food Security -Fertiliser Production and Subsidies)
Context
- Rainfall & Crop Sowing
- India had a very good southwest monsoon (June–August: 8.9% above normal rainfall).
- Farmers planted more kharif crops: paddy, pulses, coarse cereals, maize.
- As of Aug 22, rice acreage was 420.4 lakh hectares (vs 390.8 lakh last year).
- Fertiliser Consumption Surge
- With more sowing, fertiliser demand shot up.
- Major nutrients: Nitrogen (N), Phosphorus (P), Potassium (K), Sulphur (S).
- Fertiliser sales (Apr–Jul 2025 vs Apr–Jul 2024):
- Urea: 108.86 lt (+21.6%)
- DAP: 56.68 lt (+33.6%)
- NPKS: 50.03 lt (+15.5%)
- SSP: 45.06 lt (+8.6%)
- MOP: 12.42 lt (-43.6%)
- Imports & Supply Gaps
- India imports ~25–30% of fertiliser needs.
- Urea: imports down to 1.24 mt (Apr–Jun 2025) from 2.6 mt last year.
- DAP: imports down to 1.88 mt from 2.1 mt.
- Morocco & China are key suppliers.
- Global supply disruptions and China’s export restrictions worsened shortages.
- Shortages & Queues
- Farmers queued for urea/DAP at sowing time (July).
- Pre-stocking by farmers added stress.
- Shortage visible in rice-growing regions needing higher fertiliser doses.
- Policy Lessons
- Govt underestimated higher fertiliser demand due to increased paddy acreage.
- Future planning must account for fertiliser-intensive crops like rice/pulses.
- Imports need advance booking; rabi demand must be secured early.
Why the Shortage Happened
- Domestic production lag: India still depends on imports for ~30% of fertilisers.
- High demand spike: Good monsoon encouraged extra planting, esp. rice.
- Global disruption:
- China restricted exports of urea/DAP.
- Morocco’s output limited.
- Prices of raw materials like phosphoric acid and ammonia surged.
- Inefficient planning: Govt procurement underestimated demand in kharif 2025.
Economic Impact
- Farmers: Higher fertiliser prices in black markets, long queues at centres.
- Inflation risk: Fertiliser shortages can reduce yields → push up food inflation.
- Fiscal stress: Fertiliser subsidies already exceed ₹2 lakh crore annually; shortages may force more imports at higher costs.
Agriculture & Food Security
- Rice & Pulses (nitrogen-demanding crops) most affected.
- Potential yield losses if farmers can’t access fertiliser on time.
- Could reduce India’s exportable rice surplus, impacting global food markets.
Strategic Dependence
- India relies heavily on a few suppliers (China, Morocco, Oman, Russia).
- Import volatility = strategic vulnerability.
- Need for domestic revival of fertiliser manufacturing capacity.
Policy Lessons & Reforms
- Advance contracts for imports before kharif season.
- Diversify sourcing (Africa, Gulf countries, new FTAs).
- Invest in domestic production via joint ventures & PLI-type incentives.
- Promote alternative inputs: nano-urea, biofertilisers, integrated nutrient management.
- Better demand forecasting using satellite data & crop sowing trends.
