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Nutrient-based fertilizer pricing formula from April

— PHOTO: RAMESH SHARMA

NEW NOMENCLATURE: Union Minister for Steel, Chemicals and Fertilizers, Ram Vilas Paswan (right), with Secretary, Fertilizer, J. S. Sarma, addressing a press conference in New Delhi on Saturday.

NEW DELHI: The Central Government will implement a nutrient-based fertilizer pricing system to help farmers get fertilizers such as di-ammonium phosphate (DAP), muriate of potash (MOP) and complexes at cheaper rates from April.

“We have decided to implement the nutrient-based fertilizer subsidy from April 2008,” Chemicals and Fertilizers Minister, Ram Vilas Paswan, announced here at a press conference on Saturday.

The deck for the decision was cleared after the Group of Ministers (GoM) on fertilizer, headed by Agriculture Minister, Sharad Pawar, agreed on the issue of nutrient-based subsidy.

Mr. Paswan also revealed that the government was also considering setting up an independent regulatory authority for the fertilizer sector, which would fix selling prices and subsidy. Incidentally, fertilizer prices were last revised in 2003.

Elaborating on the decision, Fertilizer Secretary, J. S. Sarma, said the new pricing would help farmers get complexes at cheaper rate as these fertilizers were not covered under the current subsidy regime that covered fertilizers which mainly contained primary nutrients — nitrogen, phosphorous and potassium.

By initiating a new pricing policy, where all fertilizers would be available at uniform rates, the Centre wanted to create a set-up where farmers would be able to use fertilizer based on the requirement of the land and not be swayed by cost alone. Also, the Agriculture Ministry was in favour of restricting over-use of urea as it had pushed the nitrogen level in the soil high, which was adversely affecting production of crops.

In view of the likelihood of fertilizer subsidy bill going up to Rs. 64,000 crore in 2008-09 from over Rs. 45,000 crore in 2007-08, Mr. Paswan said his ministry had requested the Finance Ministry to allocate at least Rs. 50,000 crore in the next budget for subsidy.

Answering a question on revival of closed fertilizer units, he said, “All plants will be revived by 2011-12.”

Out of the eight closed plants of Fertilizer Corporation of India and Hindustan Fertiliser Corporation, five would be revived by National Fertilizer, Rashtriya Chemicals and Fertilizers and KRIBHCO (Krishak Bharati Cooperative). In the case of the remaining three units the Centre is discussing with States concerned for the revival, including privatisation option.

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