Fertilisers to be priced on nutrient value; will be cheaper

June 12th, 2008 - 10:25 pm ICT by IANS  

A file-photo of Manmohan Singh

New Delhi, June 12 (IANS) The government, which Thursday announced a new fertiliser policy, has decided to switch to pricing fertilisers on the basis of their nutrient value, and not brands. “The new pricing scheme for fertilisers will help lower prices of some varieties by an average Rs.1,416 ($33) per tonne,” Finance Minister P. Chidamabram told reporters after a meeting of the Cabinet Committee on Economic Affairs (CCEA) presided over by Prime Minister Manmohan Singh.

Chidamabaram ruled out any shortage of fertilisers.

“The government will ensure farmers are not dependant on the NPK and SSP varieties and move to complex fertilisers. This will maintain the balance in the soil,” said Chidambaram.

The assurance that theren would be no fertiliser shortage came in the wake of violent protests by farmers in Karnataka and Maharashtra.

Karnataka Chief minister B. S. Yeddyurappa and Maharashtra’s Vilasrao Deshmukh even met the prime minister to seek adequate supply of fertilisers in their states.

“From product-based, we are moving to nutrient-based pricing. This will also bring down the prices of complex fertilisers,” he explained.

The CCEA also decided to shift to a unified freight subsidy for fertilisers, Chidambaram said.

“This will ensure that fertiliser is available in every part of the country at the same price and will ensure there are no shortages even in the remotest part of the country,” the finance minister added.

Chidambaram said that prices of other fertilisers like urea would not change.

He said that the new nutrient-based pricing policy was aimed at lowering prices and providing adequate supplies to farmers.

“The new policy provides for a uniform freight subsidy for all fertilisers, which will facilitate uniform availability of fertilisers,” Chidambaram added.

The new policy envisages a uniform all India maximum retail price for single super phosphate (SSP) fertiliser based on the nutrient value.

The policy allows sharing the cost of sulphur by the farmer as a valuable secondary nutrient.

“The Department of Fertilizer will be authorised to revise MRP of SSP from time to time in future keeping in view the international price trend of sulphur,” a government official said.

The global rise in fertiliser prices comes as a serious challenge for the government to ensure availability of fertilisers.

The price of urea has gone up to $625 per tonne against $341 per tonne last year.

The industry sources blamed the government for the current fertiliser situation.

“The centre is yet to clear the previous year’s subsidy bill of the fertiliser-manufacturing companies estimated to be Rs. 400 billion. As result, leading to a drastic cut in the fertiliser supply,” an industry source said.

Related Stories

Tags: , , , , , , , , , , , , , , , , , , ,

Posted in Business |