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LATEST NEWS UPDATES | Neem works its magic on urea -Harish Damodaran

Neem works its magic on urea -Harish Damodaran

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published Published on Mar 24, 2017   modified Modified on Mar 24, 2017
-The Indian Express

PM Modi government’s mandatory coating policy brings down sale of fertilisers, despite record farm production

Here’s an apparent contradiction:

The Narendra Modi government claims that India’s foodgrain output will hit a record 271.98 million tonnes (mt) in 2016-17 — up from last year’s 251.57 mt — with production of rice, wheat, maize, pulses and even oilseeds estimated at all-time highs. Yet, fertiliser sales — considered a proxy for farm sector growth — are down. The accompanying table shows this to be the case with urea, di-ammonium phosphate (DAP) and complexes containing varying proportion of nitrogen, phosphorus, potassium and sulphur. The only nutrient to have registered higher offtake during April-February over the corresponding 11 months of 2015-16 is muriate of potash (MOP).

Not many are able to offer a convincing explanation for this seeming puzzle. Lower fertiliser sales in a year of agricultural rebound after back-to-back droughts, is a phenomenon never observed before. One reason being given is that sales by fertiliser firms may not be always reflective of actual consumption at the farm. There could be years when firms book higher sales, but the resultant stocks with dealers aren’t lifted at the farmers’ end. Thus, it is possible that companies last year made available large quantities of fertiliser material to wholesalers/retailers, which farmers, however, did not buy and apply in fields owing to drought conditions. “Sales have dipped this year, partly because there was lot of inventory in the system at the start of the kharif system. A significant part of farmers’ consumption requirement would have been met from these pipeline stocks with the trade. So, while our sales are lower, consumption by farmers might have still risen,” notes Suresh Krishnan, managing director of Zuari Global Ltd, which controls three fertiliser concerns: Zuari Agro Chemicals, Paradeep Phosphates and Mangalore Chemicals & Fertilisers.

Krishnan, nevertheless, concedes that “we cannot, as of now, establish whether or how much consumption has gone up”. Moreover, even the purported mismatch between sale and consumption cannot account for the extent of drop in the former. The nearly two-mt drop in urea sales is particularly striking. The agriculture ministry’s data on annual urea consumption show this to have hovered between 30 mt and 30.6 mt from 2012-13 to 2015-16. Assuming no major discrepancy between sales and consumption, the latter may end up at around 28 mt for this fiscal, a level last seen in 2010-11. G Ravi Prasad, president (corporate affairs and strategic projects) at Coromandel International Ltd, the market leader in complexes and single super phosphate, attributes the decline in sales of urea to the Centre’s decision to make 100 per cent neem-coating mandatory for both domestically manufactured and imported material. Coating of urea with neem oil — at 350 ppm or 400 ml for every tonne — has stopped the illegal diversion of the country’s most widely-consumed fertiliser for non-agricultural applications. Being heavily subsidised and, hence, cheap, urea is used as a binder by plywood/particle board makers and for sizing (smoothening) of textiles. It is also a common adulterant in milk.

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The Indian Express, 23 March, 2017, http://indianexpress.com/article/india/india-fertiliser-sales-foodgrain-output-narendra-modi-neem-urea-4581174/


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