House panel on fertiliser calls for plan to ward off West Asia-like crisis

Says current DBT framework needs a relook; comes down heavily on bundling

The Centre should institutionalise a strategic fertiliser supply disruption contingency framework with defined response protocols, alternate sourcing arrangements, strategic buffer stocks, coordinated logistics planning, and periodic review of gas allocation to ensure uninterrupted fertiliser production during crises like the one which just happened due to the West Asia war and closure of Strait of Hormuz, a standing committee of the Parliament said.

 

“The recent geopolitical developments in West Asia exposed India’s vulnerability to disruptions in fertiliser and LNG imports and highlighted the absence of a permanent contingency framework. Therefore, the committee recommends a strategic fertiliser supply disruption contingency framework with defined response protocols,” the standing committee on chemicals and fertilisers observed.

 

The committee observation came just as India managed to ward off a grave crisis to its urea, Diammonium Phosphate (DAP) and complex fertiliser supplies due to closure of the Strait of Hormuz on account of the Iran-US war. India gets significant quantum of its urea and LNG imports from the Gulf nations. With the Strait still not totally open, the crisis over supplies still lingers on.

 

The panel also came down heavily on bundling of non-subsidy fertiliser products such as nano urea bottles with urea bags. It said that as persistent advisories have failed to make any difference, time has now come for a mandatory separate digital billing of non-subsidised products sold with subsidised fertilisers, integration of bundled transaction detection into the e-Point of Sale/integrated Fertiliser Management  System (iFMS), maintenance of centralised data on complaints and enforcement action, and suitable amendments to the Fertilizer (Control) Order, 1985  to explicitly prohibit and penalise forced bundling.

 

The panel also called for a permanent joint fertiliser command and monitoring cell to facilitate real-time coordination, advance planning, buffer stock management, movement monitoring, and timely corrective action during every cropping season, and sought to be apprised of the action taken in the matter. 

 

This is meant to correct the incidents of recurring fertiliser shortages and distribution disruptions despite adequate national availability that indicated gaps in Centre-State coordination and last-mile delivery.

 

The panel also wanted optimisation of fertiliser movement to reduce freight subsidy burden.

 

“The department should undertake periodic cost-distance analyses, incorporate proximity-based optimisation into fertiliser allocation, and adopt freight efficiency as a key parameter in movement planning to reduce subsidy expenditure while ensuring timely availability of fertilisers,” the panel said.  

 

It also called for a comprehensive review of the DBT in fertilisers’ framework by using modern technological interventions, including integration with agristack and soil health card data and examination of direct benefit transfer to eligible farmers.

 

This is needed as the current subsidy reimbursement mechanism for fertiliser companies is not adequately targeted to farmers’ landholdings, cropping patterns or nutrient requirements, the committee observed.