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LATEST NEWS UPDATES | Didi’s urea stand puts govt in a fix

Didi’s urea stand puts govt in a fix

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published Published on Jan 31, 2012   modified Modified on Jan 31, 2012
-The Times of India
 
West Bengal chief minister Mamata Banerjee’s request for increased supply of urea as prices of nutrient based fertilizers are increasing has highlighted the challenges the Centre’s bid to reduce urea use and promote a more balanced product mix faces. 

Arguing that farmers should not be asked to purchase costlier nutrient-based NPK (nitrogen, phosporus and potassium) fertilizer, Banerjee has asked Prime Minister Manmohan Singh for more urea for the state. 

Banerjee has said the state should be supplied urea in keeping with its allocation as demand for the fertilizer is high. The CM’s argument that rising prices of NPK fertilizer should be offset by increased supply of urea sharpens the Centre’s dilemma as it has been seeking to push nutrientbased products and prevent overuse of urea. The problem lies in the price differential between the two as NPK fertilizer is decontrolled but urea is not. 

India needs to import urea and while the government plans to alter its pricing, the large subsidy structure is not likely to change much. The skew in prices is leading to farmers choosing urea, which over time affects both yield and soil quality and becomes an option with decreasing returns. 

Banerjee’s indirect criticism of the effects of the Centre’s new policy reflects the need to increase domestic production of urea and reduce the price gap between the two types of fertilizers. 

The use of nutrient-based fertilizers is recommended so that soil health and plant productivity is maintained. 

The government is looking to ramp up domestic urea production over the next few years so that the import gap of 9 million tonnes is reduced, if not covered. This has gained some urgency, since unless price and supply of urea are stabilized, the Centre’s moves to push nutrient-based fertilizers will be jeopardized. 

Pruning fertilizer subsidy is an important segment of the government’s bid to control a growing fiscal burden. As farmers are a politically sensitive constituency, the policy remains vulnerable to populist pressures.


The Times of India, 30 January, 2012, http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=TOINEW&BaseHref=CAP/2012/01/30&PageLabel=11&Enti


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