For the first time in 15 years, the Centre has slashed prices of Diammonium Phosphate (DAP), Muriate of Potash (MOP) and Nitrogen Phosphate & Potash composition (NPK). This is expected to reduce farmers’ dependence on urea and promote use of other nutrient-based fertilisers.
The decision, which fertiliser makers such as RCF and NFL have agreed to implement with immediate effect, has been taken to pass on the benefits of the fall in global input prices to farmers, said Chemicals and Fertilisers Minister Ananth Kumar at a press meet on Monday.
The price of DAP has been reduced by ₹125 per bag of 50 kg (₹2,500 per tonne), MOP by ₹250 per bag of 50 kg (₹5,000 per tonne) and NPK by an average of ₹50 per 50 kg bag (₹1,000 per tonne).
While private sector fertiliser companies are not statutorily bound to follow the prices announced by the government, when public sector companies such as RCF and NFL do so, the entire industry will have to follow suit.
“An annual benefit of an estimated ₹4,500 crore is likely to accrue to farmers on account of the price decrease,” the Minister said, adding that it would not increase the subsidy bill since it is just a passing on of the benefits of input price declines by companies to farmers.
Meeting with industry The Minister said that officials from the Department of Fertilisers will hold six-monthly meetings with the industry to ensure that companies manufacturing MOP, DAP and NPK fertilisers pass on the benefits to farmers. The announcement is in line with the Department’s attempts to bring balance in fertiliser use, which has tilted towards urea over the last few years, Kumar said.
Urea overuse The nitrogen, phosphorous, potash ratio in NPK should ideally be 4:2:1 but has deteriorated to 8.2:4:1. This has happened because urea (a nitrogenous fertiliser) is the only fertiliser that is sold at a statutory notified uniform sale price and is consequently cheaper than other fertilisers.
“This decision (reducing prices of fertilisers other than urea) will go in a big way in setting right distorted fertilisation and help farmers move towards balanced fertilisation to improve the fertility of soil,” Kumar said.