On urea prices: Fertiliser for thought

Source- The post is based on the article “on urea prices: Fertiliser for thought” published in “The Hindu” on 23rd June 2023.

Syllabus: GS3- Indian Agriculture – Agricultural Inputs

News– On Wednesday, the Union Cabinet approved the continuation of the urea subsidy scheme with a view to ensure supply of the fertiliser at the same price. Government has committed a total amount of Rs 3,68,676.7 crore over three years till 2024-25.

What are some facts about urea sales and pricing in India?

Urea sales in India crossed a record 35.7 million tonnes during 2022-23.

The maximum retail price of urea has remained unchanged at Rs 5,360 per tonne during the last nine years.

What are issues with use of fertilisers in the agriculture sector in India?

The present government’s initiatives such as compulsory neem coating, reducing the bag size from 50 kg to 45 kg, and launch of the Nano Urea have not brought down the consumption of the urea. 

Urea retails at a fifth or even less than that of most other fertilisers. It does not incentivise farmers to cut back on its use.

The disproportionate application of N has, over time, resulted in diminishing crop yield response. Studies have shown that 1 kg of N, P and K used to yield 12 kg-plus of cereal grains during the 1960s. But now it yields only a 5 kg surplus now.

What is the way forward for the fertiliser sector?

The Modi government has proposed the introduction of sulphur-coated urea. It would be more economical and efficient than fertiliser.

The idea of using urea as a carrier product for delivering sulphur to crops isn’t bad. The government should allow urea, di-ammonium phosphate and other commodity fertilisers to be freely coated with all secondary and micronutrients.

Further, the MRPs of such fortified fertilisers must be set free. If the yield benefits from applying sulphur or zinc-coated urea are significantly more from ordinary urea, the farmer will be paying extra.

It could also pave the way for the price decontrol of urea and bringing it under the nutrient-based subsidy regime.