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Government has made it mandatory for domestic fertiliser firms to “neem coat” at least 75 per cent of their urea production, a move that is likely to save Rs 6,500 crore subsidy outgo.
The move is aimed at checking the excessive use of urea which is deteriorating the soil health and adversely impacting overall crop yield.
”...it has now been decided to make it mandatory for all the indigenous producers of urea to produce 75 per cent of their total production of subsidised urea as Neem Coated urea,” Fertiliser Ministry said in a notice to the domestic urea manufacturers.
Removing the cap on neem coating of urea in January this year, and allowing fertiliser firms to coat the 100 per cent of urea produced by them with neem, Fertiliser Minister Ananth Kumar had said that with the use of neem coated urea, there will be more yield to the extent of 15-20 per cent and with less use of urea to the extent of 15-20 per cent.
Kumar had also said that government’s subsidy bill could reduce up to Rs 6,500 crore annually.
According to sources, the higher usage of neem-coated urea would check diversion of urea for industrial use.
Urea is excessive used as it is highly subsidised and its retail price of urea is fixed at Rs 5,360 per tonne. Therefore farmers use it even in place of other partially decontrolled NPK fertilisers.
According to officials in both Agriculture and Fertiliser Ministries, the soil health is deteriorating because of excessive use of urea and it has disturbed the ideal N (nitrogen) P (phosphorus) and K (potash) ratio of 4:2:1.
Fertiliser Secretary J K Mohapatra has said that neem coated urea also works as insecticide and it will cost just 5 per cent more than the cost of normal urea which is about Rs 260 per tonne and about Rs 10 per bag.
Industry body Fertiliser Association of India has welcomed the move and said that the industry has been demanding for removing the cap on production of neem coated urea for last many years and added it will help maintaining the ideal nutrient ration in soil.
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