Fertilizer Sector Current Affairs - 2020

Union Cabinet approves Nutrient Based Subsidy

On April 22, 2020, the Union Cabinet approved to fix Nutrient Based Subsidies for Phosphatic Potassic fertilizers.

Highlights

The cabinet also approved the use of complex fertilizer namely Ammonium Phosphate. The expenditure to be spent on the subsidy of the fertilizer is expected to be Rs 22,186 crores.

The nitrogenous fertilizers are to be provided at the rate of Rs 18.78 per kg, Phosporous at Rs 14.88 per kg, Potash at Rs 10.11 per kg and Sulphur at Rs 2.37 per kg.

Background

The Government of India has been providing potassium and phosphorous fertilizers to farmers in subsidy rates. These subsidies are governed by the NBS scheme that was launched in 2010.

Nutrient Based Subsidy Scheme

Under the scheme, the fertilizers except urea are to be provided to the farmers at subsidized rates. The scheme focuses on secondary nutrients such as N,P,K and S and also micro nutrients.

Parliamentary Standing Committee: No Sufficient Checks on genuineness of Fertilizer Subsidy

On March 20, 2020, the Parliamentary Standing Committee that was set up under the leadership of the Lok Sabha Member Kanimozhi Karunanidhi submitted its report. The Committee was set up to check whether genuine farmers are getting fertilizer subsidy.

Highlights

The Report says that until December 2019, 1182.04 lakh metric tonnes of fertilizers have been sold under Direct Benefit Transfer Scheme. Currently, the identity of the buyer or farmer is authenticated through Aadhar-based identification, Kisan Credit Card, biometric or voter ID.

According to the committee, there are chances of misuse of the methodology by retailers. The retailers might collect Aadhaar cards or demand thumb impression for an amount. They are then selling the fertilizers in black market showing false sale.

What is the issue?

Currently, the subsidies are paid to the fertilizer companies based on the receipts of their sales made by the retailers to the beneficiaries. This has created a black market and is hurting farmers badly.

Also, fertilizers subsidies consume 0.5% of GDP which is the second highest after food.

Solution

The GoI in order to curb black marketing of fertilizer introduced Point of Sale machines selling of fertilizers. These machines were directly connected to the central server that captures details of every buyer. Hence, the data collected will help identify the impersonator.

Types of Fertilizers

The three major types of fertilizers used are Urea, Muriate of Potash and Diammonium Phosphate. O all these fertilizers, urea accounts to 86%. Currently, GoI is taking several steps to control the use of urea and replace it with NPK fertilizers.