A study by the Indian Institute of Management, Ahmedabad (IIM-A) suggests that for self-sufficiency in agricultural production, availability of fertilisers at affordable prices should be prioritised over higher output prices.
The study ‘Demand for Fertiliser in India: Determinants and Outlook for 2020’, was done by Professor Vijay Paul Sharma of the Centre for Management in Agriculture, IIM-A, and Hrima Thaker of the same institute. It has projected the demand for fertilisers in India to increase to 41.6 million tonnes by 2020.
By estimating the demand for fertilisers, one can understand the implications of fertiliser price policy including subsidy and agricultural product price for fertiliser use and their interrelationship, Mr Sharma said.
“The results clearly indicate that non-price factors such as irrigation, high-yielding varieties and cropping intensity were more powerful in influencing the demand for fertilisers compared with price factors,” the study said.
“Price of fertilisers had an adverse affect on fertiliser consumption and was more powerful than output price,” it added.
“In order to ensure self-sufficiency in foodgrains production in the country, availability of fertilisers at affordable prices to the producers is of utmost importance,” the study concluded.
“The high product price support policy benefits the large farmers who have net marketed surplus while low input prices benefit all categories of farmers,” the study said.
With regard to calculating the demand for fertilisers in the future, it has made a projection using annual time series data from 1976-77 to 2009-10 and using simple linear regression model using ordinary least squares (OLS) method.
“By 2020, fertiliser demand in the country is projected to increase to about 41.6 million tonnes and is expected to grow at a faster rate in eastern and southern regions compared with north and west,” the study concluded.
As per the data collected for the study, the overall consumption of fertilisers in the country has increased from 65.6 thousand tonnes in 1951-52 to 26.49 million tonnes in 2009-10.
Accordingly, per hectare consumption of fertilisers, which was less than one kg in 1951-52, has gone up to the level of 135 kg in 2009-10.
The average intensity of fertiliser use in India at national level was still much lower than in other developing countries and there were many disparities in fertiliser consumption patterns both between and within regions of India, it said.
“About 18 per cent of the districts in the country account for half of total fertiliser use while bottom half of the districts account for only 15 per cent of total fertiliser used in the country,” an analysis of data from the Fertiliser Association of India and Agriculture department, done during the study indicated.
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