Business Daily from THE HINDU group of publications
Thursday, Aug 02, 2007
ePaper
Business Daily from THE HINDU group of publications Thursday, Aug 02, 2007 ePaper |
|
|
|
|
|
|
|
Agri-Biz & Commodities
-
Fertilisers Conducive fertiliser policy urgently needed, say experts
G.K. Nair Kochi, Aug. 1 A conducive fertiliser policy to sustain health and growth of the industry is an urgent necessity as fertiliser security is a prerequisite for food security in the country, which cannot depend on increasing import of fertiliser and/or foodgrains at significantly higher prices, according to experts. Speaking at a seminar on ‘Indian fertiliser industry’, Mr Pratap Narayan, former Director-General, Fertiliser Association of India, said the subsidy requirements were growing and its “ballooning” was caused by increased consumption, sharp increase in cost of production and distribution and inadequate increase in farmer price. The Government has made no adjustment in farmer price in line with increasing cost, nor has it controlled increase in cost of inputs/service provided mainly by its agencies, he added. Higher farm subsidies
Stating that developed countries were doling out much higher farm subsidies – $281 in the EU, $144 in the US and $386 in Japan – he said the figure for India was just $9. Therefore, elimination of agricultural subsidies in the country is “unthinkable,” as over 70 per cent of Indian population is rural and depends on agriculture for livelihood, he said. Besides, the net result of the new prices scheme (NPS) introduced in April 1, 2003 is that there are no uniform price for units in a group; almost as many prices as units; and recovery of about Rs 1,500 crore of legitimate costs by industry. According to him, the fertiliser industry is at a crossroads as the reform process has completely bypassed the industry, which continues under old controls. As a result, commitment for the industry’s viability has fallen by the wayside “due to adoption of a policy which averages costs, applies actual or normative, whichever-is-lower principle and penalises improved performance. In fact, reform is needed now.” There is stagnation in the fertiliser industry, according to Dr M.P.S. Nair, Managing Director, Travancore Cochin Chemicals (TCC). Over the years, the gap between domestic production and consumption of fertilisers has been widening, he said. Consumption growth
On an average, 8.4 per cent growth in consumption has been taking place since 2004. By the end of the 11th Plan, the demand-supply gap is expected to be 16 million tonnes, which is to be met by imports. Beside, large quantum of fertiliser raw materials will also have to be imported. These huge imports would lead to serious infrastructure bottlenecks in terms of port capacity, transportation and inland distribution, besides pushing up prices. “Unless urgent steps are taken to address the prevailing sickness in the fertiliser industry, by incentivising maximum production from existing plants and making further investment sufficiently attractive, a crisis in the availability of fertiliser materials is unavoidable,” he told Business Line. Over the years, the role of public sector units in the fertiliser industry has diminished; currently, it is predominantly an activity of the private and co-operative sectors. New investments are not coming up since no incentive exists. Mr K. Chandran Pillai, MP, who was instrumental in organising the seminar, said that Fertilisers and Chemicals Travancore (FACT) was one of the worst-affected fertiliser producers among the Central public sector undertakings in the country on account of the changes in Government policies, increase in the cost of energy inputs and lack of proper diversification and expansion.
More Stories on : Fertilisers | Agricultural Policy
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | The Hindu ePaper | Business Line | Business Line ePaper | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2007, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|