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LATEST NEWS UPDATES | Urea price decontrol will raise yields: U S Awasthi, Managing Director, IFFCO

Urea price decontrol will raise yields: U S Awasthi, Managing Director, IFFCO

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published Published on Apr 11, 2012   modified Modified on Apr 11, 2012
-The Economic Times

Fertiliser will continue to be a key input in the crop production system as there are no alternatives to meet nutritional requirement of crops. Post-Independence, a substantial increase in indigenous production and consumption of urea and a range of P and K fertilisers made the country self-reliant both in fertiliser and food grain production. But farm production is stagnant though fertiliser use has been rising. The bone of contention is the subsidy on urea. It should be reduced drastically. 

Urea prices are much lower than other commonly-used P and K fertilisers, leading to its indiscriminate use. This has led to occurrence of multinutrient deficiency, hurting crop productivity and soil health. It is time to curtail subsidy on urea by hastening the process of its decontrol. 

Subsidy should flow directly to the needy, instead of universal subsidy. Urea price decontrol will usher in a market for consumers, rather than producers. It will enable farmers to cautiously and judiciously use the ingredient. 

The options include: complete decontrol of urea prices; at least 50% increase in prices immediately to offset the subsidy bill by a sizeable amount; at least 10% increase in urea prices annually to help lower the fertiliser subsidy; minimise imports to curb excessive use of urea; and finally, to fix the quantity of urea based on land holding and nature of crops grown on it, factoring in cropping intensity of farm land. 

The last approach needs a scientific intervention to ensure balanced fertiliser use. However, at this point of time, this seems to be out of reach due to non-availability of related databases on soil health, nature of crops grown and so on. 

So, efforts akin to what Iffco has implemented for soil health rejuvenation and productivity enhancement are worth replicating. These include thrust on activities like soil testing, land reclamation, incorporation of crop residue in soil, use and inclusion of organic and green manure, crop rotation and diversification systems and, above all, balanced fertilisation in proper doses. 

These interventions have helped raise productivity of crops in the range of 15-40%. Proper pricing of each nutrient is a must. Decontrol of urea prices is the crucial ingredient. 


The Economic Times, 11 April, 2012, http://economictimes.indiatimes.com/opinion/et-debate/urea-price-decontrol-will-raise-yields-u-s-awasthi-managing-director-iffco/articleshow/12616062.cms


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