Why in the News?

India is currently grappling with significant challenges in meeting its fertilizer demands due to dependency on imports, especially amidst the ongoing Ukraine and Gaza crises, which could further impact fertilizer availability and prices.

What’s in Today’s Article?

• About Fertilizers (Meaning, Utility, Types)
• Fertilizer Imports (Current Scenario, Trends, Strategic Initiatives, Suggestions, etc.)

About Fertilizers:

• A fertilizer is a chemical product either mined or manufactured material containing one or more essential plant nutrients that are immediately or potentially available in sufficiently good amounts.
• Fertilizers have played an essential role in agricultural production, providing vital nutrients for crops, increasing demands over the years.
• As an agrarian country, India is home to numerous small and marginal farmers and is often plagued by low productivity and low quality.
• Crops are mainly rain-fed and cultivated on a single piece of land over time, decreasing soil fertility in many regions.
• Thereby, increasing quantities of nitrogen fertilizers have been used in the country.

Macro & Micro Elements in Fertilizers:

• Macro Nutrients: Nitrogen (N), Phosphorus (P), Potash (K), Calcium, Sulfur (S), and Magnesium are known as macro-nutrients (required in comparatively larger amounts).
• Micro Nutrients: Iron (Fe), Zinc (Zn), Copper, Boron, Manganese Molybdenum, Chloride, and others are the micro-nutrients (required in a smaller quantity) for the growth and development of crop plants.
• Among the various types, NPK (nitrogen, phosphorus, and potassium) fertilizers are the most common ones, and Urea stands as the most highly consumed fertilizer in India.
• India is the second-largest consumer of fertilizers globally, with an annual consumption of more than 55.0 million metric ton.

Current Fertilizer Import Scenario:

• India’s domestic fertilizer production does not meet its full demand, creating a dependency on imports. As per the 2023 Standing Committee of Parliament report:
  • Urea: 20% of the domestic requirement is imported.
  • Diammonium Phosphate (DAP): 50-60% of the demand is met through imports.
  • Muriate of Potash (MOP): 100% dependency on imports.
• The report stresses a need for self-reliance in fertilizer production to stabilize supplies.

Production and Consumption Trends:

• India’s annual fertilizer consumption in 2021-22 was 579.67 lakh metric tonnes (LMT), with:
  • Urea: 341.73 LMT
  • DAP: 92.64 LMT
  • MOP: 23.93 LMT
  • NPK (Nitrogen, Phosphorus, and Potassium): 121.37 LMT
• Domestic production for the year totalled 435. 95 LMT, leaving a shortfall of 143.72 LMT. Notably, MOP is entirely imported due to the lack of local production.

Impact of the Ukraine and Gaza Conflicts:

• Experts, at the Food and Agriculture Organization (FAO), highlighted potential volatility in fertilizer prices due to the Ukraine and Gaza conflicts. This unrest could:
  • Affect oil prices, impacting petroleum-based fertilizer production.
  • Disrupt imports from Russia and West Asia, two significant suppliers for India’s fertilizer imports.

Financial Burden of Fertilizer Subsidies:

• The Indian government has allocated substantial funds to support fertilizer affordability. In the 2023-24 Budget:
  • Total subsidy: ₹1.79 lakh crore.
  • Indigenous Urea subsidy: ₹1.04 lakh crore.
  • Imported Urea subsidy: ₹31,000 crore.
  • Indigenous P&K Fertilizer subsidy: ₹25,500 crore.
  • Imported P&K Fertilizer subsidy: ₹18,500 crore.
• These subsidies, while necessary for farmers, impose a heavy financial burden on the government.

Strategic Initiatives for Self-Reliance:

• Experts recommend increasing India’s production capacity and reducing reliance on imports:
  • New Urea Plants: Since the 2012 investment policy, six new urea plants have been established, adding 76.2 LMT to India’s production capacity. Currently, 36 urea plants operate, with recent additions like Ramgundam, Gorakhpur, Sindri, and Barauni facilities.
  • Shift to Sustainable Fertilizers: Emphasis on nano urea and natural farming could reduce chemical fertilizer usage and dependency.
  • Investment in Domestic Production: The Standing Committee suggests fostering a favorable environment for investments from public, cooperative, and private sectors in fertilizer manufacturing.

Policy Recommendations and Future Outlook:

• The Standing Committee recommends:
  • Increasing incentives for fertilizer manufacturing within India.
  • Encouraging use of nano urea and shifting focus to organic and sustainable farming practices.
  • Investing in infrastructure to better utilize existing fertilizers efficiently.
• By expanding production capacities and promoting sustainable agricultural practices, India could gradually reduce its dependency on imported fertilizers, stabilizing the domestic market and insulating it from global disruptions.