The Hindu Business Line : Fertiliser policy

“Fertiliser policy: Falling short of goals” (Business Line, August 8) is a revealing and informative contribution to a highly important subject, inadequately appreciated by many. The New Fertiliser Policy of the 1960s enunciated by C. Subramanian, the then Union Agriculture Minister, was virtually the foundation of the fertiliser industry in India.

The growth of the industry and of fertiliser subsidy are so closely inter-linked with agricultural development, food security, poverty alleviation and inclusive growth that they deserve the closest attention at the highest levels of government.

International fertiliser prices are an outcome of the play of several dynamic factors, such as oil price, prices of raw materials, fluctuating agricultural fortunes the world over, and consumption patterns of major buyers like India and China.

Hence, linking domestic pricing to international prices is tantamount to allowing the prices to dance to the tune of fluctuating world prices without due safeguards.

As the article highlights, the linking of subsidy to import parity prices has resulted in steep increases in all prices and their raw materials. As a result, the per tonne subsidy on imported urea rose from Rs 11,576 in 2004-05 to Rs 14,340 in 2007-08 and further to Rs 22,824(E) in 2008-09. That of DAP went up from Rs 4,396 in 2004-05 to Rs 12,016 in 2007-08 and further to Rs 27,408(E) in 2008-09.

Obviously, this is an undesirable feature in the context of the growing population and the crying need for stability and food security.

It is time the Government took serious note of the issues at stake and put fertiliser production and distribution on a much firmer footing to drive the “inclusive” growth processes.

K. U. Mada Mumbai