Barnala Seeks Ad Hoc Subsidy On Phosphate Fertilisers

Fertiliser minister S S Barnala has sought Prime Minister Atal Bihari Vajpayee's intervention in finalising ad hoc subsidies for di-ammonium phosphate (DAP) and related complex fertilisers.

The delay in the announcement of subsidies by the agriculture ministry has already resulted in acute shortages of potassic and phosphatic fertilisers, he said.

The DAP shortage is expected to surface more intensely during the Rabi season when supplies are expected to dry up substantially.

In a letter to the Prime Minister, who holds charge of the agriculture ministry, Barnala has pointed out that the uncertainties regarding the rate of ad hoc concession has resulted in a 50 per cent drop in DAP imports.

Only eight lakh tonnes of DAP had been imported against 15 lakh tonnes by April last year. Importers had canceled contracts for around 1.5 lakh tonnes of DAP.

The problem has been aggravated by the Gujarat cyclone which destroyed large quantities of DAP stocked at ports. This could result in a 20 per cent _ one million tonnes _ shortfall in the availability of DAP this year.

Barnala's appeal to the Prime Minister follows his unsuccessful attempts with minister of state for agriculture Sompal for an early announcement of the ad hoc subsidy.

The agriculture ministry, on the other hand, is reportedly pleading helplessness in announcing the subsidy in the absence of a study being conducted by the Bureau of Industrial Costs and Prices (BICP) on the quantum of concessions to be given to producers and importers, of DAP and other complex fertilisers. Though BICP was supposed to have completed the study (based on cost of production of domestic manufacturers) by May, it is learnt that the study may not be complete for another month.

Importers and domestic manufacturers are pleading helplessness in entering into bulk imports of DAP and its raw material (most of which is imported) unless the extent of concession is known. This is so because the consumer price has already been fixed by the government.

The fertiliser department is of the view that even if imports are contracted for in the next few weeks, the logistic of imports will mean that the nutrients will not be available at the time the Rabi sowing takes place.