Article 2: Fertiliser Security & Strategy
Why in News: Escalating geopolitical tensions in West Asia and disruptions in global energy markets have raised concerns over fertiliser prices and India’s food security.
Key Details
- India imports around 25% of its urea consumption, with nearly 40% sourced from West Asia.
- Nearly 85% of natural gas used in domestic urea production is imported, largely from Gulf countries.
- Retail prices of urea (₹5,922/tonne since 2012) and DAP (₹27,000/tonne since Covid period) remain administratively controlled.
- Rising geopolitical risks highlight the need for a long-term fertiliser strategy, not temporary crisis management.
Import Dependence & Geopolitical Vulnerability
- High Urea Import Dependence: India imports about one-fourth of its urea, exposing agriculture to international supply disruptions and price volatility.
- West Asia Concentration Risk: A large share of gas and fertiliser imports originate from Qatar, UAE, Saudi Arabia, Kuwait, and Iran, making supply chains vulnerable to regional conflict.
- Phosphatic & Potassic Dependence: India lacks adequate reserves of rock phosphate, potash, and sulphur, resulting in heavy dependence on countries like Russia, Belarus, Morocco, and China.
- Energy–Fertiliser Linkage: Natural gas is the key feedstock for urea production; fluctuations in gas prices directly raise fertiliser costs and subsidy burden.
- Past Precedents: During the Russia–Ukraine conflict (2022), global fertiliser prices surged sharply, significantly increasing India’s fertiliser subsidy bill.
Fertiliser Pricing Policy & Subsidy Structure
- Price Controls on Urea: The retail price of urea has remained fixed at ₹5,922 per tonne since 2012, insulating farmers from global price shocks.
- Nutrient Based Subsidy (NBS) Scheme: While phosphatic and potassic fertilisers fall under NBS, urea remains outside it, creating price distortions in fertiliser usage.
- Rising Consumption Trends: Urea sales increased from under 30 million tonnes (2017–18) to nearly 40 million tonnes projected recently, reflecting overuse due to low prices.
- Subsidy Burden: Fertiliser subsidy has crossed ₹2 lakh crore in recent years during global price spikes, impacting fiscal stability.
- Underpricing & Imbalance: Cheap urea leads to nitrogen-heavy fertilisation, disturbing the ideal N:P:K ratio (recommended 4:2:1 but skewed in practice).
Impact on Food Security & Agricultural Sustainability
- Input Cost Stability vs Fiscal Risk: Subsidies protect farmers and food security but strain public finances during global shocks.
- Soil Health Concerns: Excessive nitrogen use reduces soil fertility, increases greenhouse gas emissions (N₂O), and lowers long-term productivity.
- Climate & Geopolitics Dual Risk: Indian agriculture now faces risks from both climate change and global supply disruptions, making resilience critical.
- Yield Dependency on Fertilisers: The Green Revolution boosted output using chemical fertilisers, but current overuse calls for efficiency, not expansion.
Need for Strategic Reform
- Consumption Capping: Rationalising fertiliser usage through limits and balanced application can prevent overuse and reduce imports.
- Direct Benefit Transfer (DBT) Reform: Shifting from product-based subsidy to per-acre or per-farmer income support could ensure efficient nutrient use.
- Promotion of Nano & Specialty Fertilisers: Encouraging nano-urea, drip irrigation, and foliar application enhances nutrient-use efficiency and reduces wastage.
- Agri Stack Integration: Linking digital farmer IDs with land records and cropping data can enable targeted subsidy delivery and monitoring.
- Diversification of Import Sources: Securing long-term supply agreements and investing in overseas mineral assets can enhance fertiliser security.
Conclusion
India must transition from reactive subsidy management to a comprehensive fertiliser security strategy. This includes diversifying supply chains, promoting balanced nutrient use, reforming subsidy architecture, strengthening soil health programmes, and leveraging digital agriculture platforms like Agri Stack. Ensuring fertiliser resilience is essential for safeguarding food security, fiscal prudence, and sustainable agricultural growth.
EXPECTED QUESTION FOR UPSC CSE
Prelims MCQ
Which of the following fertilisers is not covered under the Nutrient Based Subsidy (NBS) scheme?
(a) Urea
(b) DAP
(c) MOP
(d) Complex fertilisers
Answer: (a)