Reducing urea Consumption in India

GS Paper 3

 Syllabus: Issues related to Direct and Indirect Farm Subsidies

Source: IE

 Context: None of the government measures has succeeded in reducing urea consumption in India.

Background:

• In 2015, the Centre made it mandatory to coat all indigenously manufactured and imported urea with neem oil.
• This was followed by replacing 50-kg bags with 45 kg ones in 2018, and the launch of the liquid ‘Nano Urea’ by the Indian Farmers’ Fertiliser Cooperative (IFFCO) in 2021.
• The above measures aimed at checking illegal diversion for non-agricultural use, and increasing nitrogen use efficiency, have failed in reducing urea consumption.

Sales of urea in India:

• After neem-coating was fully implemented, consumption did decline for the first two years, but that trend reversed from 2018-19.

NBS:

• Fertilisers are essentially food for crops, which need nutrients (for plant growth and grain yield) –
  • Primary (N, P, K),
  • Secondary (S, calcium, magnesium) and
  • Micro (iron, zinc, copper, manganese, boron, molybdenum).
• With this in mind, the nutrient-based subsidy (NBS) regime was launched in India in 2010.
• Under NBS, the government fixed a per-kg subsidy for each fertiliser nutrient: Nitrogen (N), phosphorus (P), potash (K) and sulphur (S).

Purpose of NBS:

• This (unlike the earlier product-specific subsidy regime) was intended to promote balanced fertilisation by discouraging farmers from applying too much –
  • Urea,
  • Di-ammonium phosphate (DAP) and
  • Muriate of potash (MOP).
  • These are fertilisers with high content of a single nutrient: Urea (46% N), DAP (46% P plus 18% N) and MOP (60% K).
• It was expected to induce product innovation, besides more use of complex fertilisers (having lower concentrations of N, P, K and S in different proportions) and single super phosphate – SSP (containing only 16% P but also 11% S).

Failure of NBS: Worsening of nutrient imbalance, with urea consumption rising by over a third since 2009-10.

Reasons behind rising urea and DAP consumption:

• Its maximum retail price (MRP) went up by a mere 16.5% from Rs 4,830 to Rs 5,628 per tonne post the introduction of NBS.
  • The current per-tonne MRP – Rs 5,628 for urea, Rs 27,000 for DAP and Rs 34,000 for MOP – are nowhere compatible with a 4:2:1 NPK use ratio generally considered ideal for Indian soils.
• Price controls on DAP, with companies not allowed to charge more than Rs 27,000 per tonne.

The cost of disproportionate application of N by farmers:

• During the Green Revolution, higher doses of fertiliser application produce more grain.
• Over time, crop yield response to fertiliser use has more than halved: 1 kg of NPK nutrients yielded 12.1 kg of cereal grains during the 1960s, and 5 kg during the 2010s.
• The decline in nitrogen use efficiency (NUE has fallen from 48.2% in 1962-63 to 34.7% in 2018), which refers to the proportion of N applied mainly through urea that is actually utilised by crops to produce harvested yields.

The solutions:

• Reduce the consumption of N and promote products containing other nutrients in desired (crop- and soil-specific) combinations.
  • The government should make the incorporation of urease and nitrification inhibitors (a chemical that makes more N available to the crops) compulsory in urea.
• There are two approaches to cutting urea consumption – raising prices and improving NUE.
  • Nano Urea is primarily aimed at boosting NUE.
  • The ultra-small size of its particles (20-50 nanometers) is said to allow easier penetration through the stomatal pores of leaves.
  • If the government wants to promote Nano Urea (for foliar application directly to the leaves), it may have to subsidise the cost of spraying.

Insta Links:

First urea and now DAP: High use of subsidised fertilisers raises crop yield fears

Mains Links:

How do subsidies affect the cropping pattern, crop diversity and economy of farmers? What is the significance of crop insurance, minimum support price and food processing for small and marginal farmers? (UPSC 2017)

Prelims Links: UPSC 2020