Indian agriculture, while establishing new records of production, has become resource intensive over the years. Sustainable agriculture requires good soil health, optimum use of resources and minimum impact on environment.
High yielding varieties of crops require high nutrient inputs through chemical fertilizers which have high concentration of plant nutrients. But, steep increase in use of chemical fertilizers is resulting in diminishing return in terms of crop productivity.
Equally important is the fact that nutrients not used by the crops escape to the environment with huge greenhouse effect in atmosphere and pollution of water. Nitrogen (N) remains the major culprit causing damage to the environment.
This is because only 35-40 per cent of applied nitrogen is utilised and rest escapes to surface or groundwater and atmosphere. The other primary nutrients phosphorus (P) and potash (K) remain fixed at least partially in the soil and remain available to the subsequent crops.
United Nations Environment Programme adopted a resolution in 2019 on ‘Sustainable Nitrogen Management’. Its inappropriate use has created problems both for economics of farming and environment. Application of nitrogen in India increased from 4.7 kg at the advent of green revolution in 1967-68 to 93.3 kg per hectare in 2023-24. But averages hide large variations across States.
For example, N consumption was 187 kg in Punjab,167 kg in Haryana and 153 kg/ha in Andhra Pradesh in 2023-24. Certain districts of these States consume even more than 200kg/ha while recommended dose is usually 120kg/ha.
Price distortions
Urea is the main product supplying nitrogen and DAP is the major product supplying phosphate in India. Before decontrol of prices of P and K fertilizers in 1992, the DAP: urea retail price ratio used to be 2:1, which got distorted due to ad-hoc approach to pricing and subsidy policy for P&K fertilizers, which reduced the subsidy on these components drastically. Nutrient Based Subsidy (NBS) scheme was introduced in 2010 to address the inter product distortion in retail prices.
But urea has not been brought under NBS policy even after 15 years of introduction of the scheme. The retail price of urea has remained almost frozen since then. At present retail price of DAP is almost five times that of urea. The Muriate of Potash (MOP), costs at least six times more than urea. Such distortion in prices of fertilizer products induced the farmers to use more urea than required.
The ratio of use of the primary nutrients is far away from the benchmark in most major States. N:P use ratio should be 2:1 but it is close to 4:1 in Punjab and Haryana. There is similar distortion in N:K use ratio in these States.
Farmers are losing money on excess urea even after buying at heavily subsidized prices because it does not give any additional yield. Government is losing even more by way of subsidy on this incremental quantity. It is also waste of precious natural resources. India is heavily dependent on import of gas for production of urea. Therefore, excess imports also add to balance of payment problem.
There is no easy way out of this chakravyuh of policies which have become embedded over more than four decades. In absence of sweeping reforms, it is essential that at least incremental steps are taken. This can be in form of gradual rationalization of subsidy on urea and P and K fertilizers to create a balance in retail prices of different products. In the group of P and K fertilizers there are more than dozen products included in NBS scheme. DAP is being favoured with extra subsidy over and above that determined under NBS scheme. This insulated the farmers from any increase in retail price of DAP but discriminated against non-DAP complex fertilizers.
In the interest of balanced fertilization, use of complex fertilizers needs to be encouraged. The instrument of subsidy should induce balanced fertilization including use of micronutrients and organic manure. It will increase use efficiency of all nutrients and maximize yields. This in turn will reduce input cost for farmers, save on subsidy and most important reduce impact on environment.
The writer is Visiting Professor at ICRIER. Views expressed are personal