Underpricing urea increases consumption
- The sales of urea have crossed an all time high 35.7 million tonnes (mt) in 2022-23. Urea is the primary cause of worsening plant nutrient imbalance and deteriorating soil health.
Government measures to control urea consumption
- Nutrient-based subsidy (NBS) regime: In order to promote balanced fertilization of soil, Nutrient Based Subsidy (NBS) programme for fertilizer was initiated in the year 2010. Under the scheme, a fixed amount of subsidy decided on an annual basis is provided on each grade of subsidized Phosphatic and Potassic (P&K) fertilizers based on its nutrient content.
- Neem coated urea: The Department of Fertilizers (DoF) has made it mandatory for all the domestic producers to produce 100% urea as Neem Coated Urea (NCU), to Improve soil health, Reduce usage of plant protection chemicals etc.
- Nano urea: It is urea in the form of a nanoparticle to replace conventional urea that can curtail the requirement of the same by at least 50%.
- Encouraging farmers to Incorporate compounds that reduce ammonia volatilisation.
- None of the above said measures have succeeded in their stated goal of achieving balanced fertilization.
- Urea consumption has gone up by over a third compared to the pre-NBS year of 2009-10.
- Instead of discouraging nitrogen use at the expense of other primary, secondary and micronutrients, farmers are over-applying urea which is clear evidence of declining nitrogen use efficiency and crop yield response to fertilizers.
Reason for skewed nutrient usage
- The maximum retail price (MRP) of urea has been unchanged per tonne since November 2012 which is priced far less than other fertilizers like di-ammonium phosphate,muriate of potash and other complex fertilizers.
- Linking subsidy to the nutrient content of fertilizers failed because NBS excluded urea and was implemented only for other fertilizers.
- Raising the maximum retail price (MRP) of urea is the only solution to control rampant overuse of urea resulting from underpricing.
- Bringing urea under NBS while decontrolling MRP of urea would pay a fixed per-tonne subsidy linked to its nutrient content of 46 per cent nitrogen.
- In the long run, even the NBS should be replaced by a flat per-acre subsidy that could be given for every crop season which would result in judicious application of fertilizers.
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