Government Urged to Reform Fertiliser Policy for Food Security Amid Global Conflicts
Ceasefire Announcement and Global Tensions
Recently, a two-week ceasefire was announced by US President Donald Trump just before a critical deadline, alleviating immediate concerns over escalating tensions related to conflicts between Iran and the US-Israel. This moment offers a glimmer of hope for civilians affected by ongoing hostilities, emphasizing the need for a durable resolution to such geopolitical conflicts.
India faces a critical juncture, drawing lessons from both the Middle Eastern and European conflicts. As global conditions stabilize, prioritizing food security becomes essential for the Indian government, especially in light of the nation’s significant reliance on imported fertilisers and the volatility of global markets.
Fertiliser Dependence and Market Dynamics
India’s dependence on imported chemical fertilisers, particularly urea, poses a challenge in attaining food security. Approximately 70% of the country’s fertiliser requirements are met through imports. For instance, India consumes around 40 million tonnes (MT) of urea annually, with about 10 MT being imported. Additionally, domestic production relies heavily on imported gas, accounting for nearly 85% of its requirements.
Due to recent global conflicts, urea prices surged by nearly 65%, escalating from $482 per tonne to $795 per tonne within 40 days. Natural gas prices also increased significantly, reflecting broader market disruptions linked to geopolitical tensions. This scenario has led the Indian Cabinet to approve a higher subsidy on urea to prevent domestic price hikes for farmers.
Rising Costs of Other Fertilisers
The prices of phosphatic fertilisers, although not as drastically affected as urea, have also seen increases. Diammonium phosphate (DAP) prices rose from $627 per tonne to $720 per tonne. Compounding these challenges, sourcing DAP and its components from Gulf nations has become increasingly difficult.
Concerns regarding the overuse of urea in farming practices are prevalent. Reports indicate that farmers often apply more urea than necessary, leading to inefficient resource utilization and potential misuse for non-agricultural purposes. This has prompted discussions on implementing quantitative rationing to ensure that urea supplies are allocated more judiciously based on agricultural needs and practices.
Environmental Implications and Irrational Pricing
The current application methods for granular urea in India yield a low Nutrient Use Efficiency (NUE) of approximately 35 to 40%. Consequently, majority of the nitrogen applied is lost to the environment. In contrast, methods such as liquid urea application demonstrate a much higher NUE of nearly 90%. Experts argue for a reevaluation of current fertiliser pricing structures to promote more effective agricultural practices.
Efforts by the government, such as those from Minister for Agriculture and Farmers’ Welfare Shivraj Singh Chouhan, propose cash transfers to farmers that reflect fertiliser subsidies. Nevertheless, ambiguities regarding tenant farmers, who are not included in current schemes, hinder the effectiveness of these initiatives. Suggestions have been made to streamline financial assistance by combining existing subsidy schemes and directly compensating farmers based on land usage.
Strategic Recommendations for Policy Reform
Addressing these challenges requires a shift in policy. For instance, reducing nitrogen content in DAP and promoting the use of Triple Super Phosphate (TSP) could enhance the efficiency of phosphatic fertiliser application, allowing for better crop yields and reducing nitrogen subsidies. By incentivizing TSP production domestically or through partnerships with phosphorus-rich nations, India could effectively address its fertiliser balance.
The Indian government faces an urgent need to reform its fertiliser policies to ensure food security through direct benefit transfer mechanisms or rationing strategies. Such measures are essential to mitigate the risks posed by global market fluctuations and ensure both agricultural productivity and environmental sustainability.
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