The government is seriously considering options for decontrolling urea by either fixing a nutrient-based subsidy(NBS) rate or making direct payment of subsidy to farmers' account, Fertiliser Minister Sadananda Gowda said on Wednesday.
In 2010, the government had launched the NBS programme under which a fixed amount of subsidy, decided on an annual basis, is provided on each grade of subsidised phosphatic and potassic (P&K) fertilizers, except for urea, based on the nutrient content present in them.
"As far as change in the urea policy is concerned, we are open to suggestions. It can be NBS for urea or direct subsidy to the farmers account with decontrol of fertilizer sector. These are some of the alternatives which are under discussion," Gowda said while addressing an event organised by the Fertiliser Association of India (FAI) here.
He further said that the government is "actively pursuing the issue of revision of fixed cost under urea policy" and added that any change in policy should protect the interest of farmers, industry and help conserve resources.
Currently, urea is the only controlled fertilizer and is sold at a statutory notified uniform sale price. Its maximum retail price is fixed at Rs 5,360 per tonne. It is the most commonly used fertiliser because it is highly subsidised.
Noting that the government is aware of the challenges faced by the industry, Gowda said, however there are "no short cut solutions" to the structural problems but the government is working very hard to find possible way out.
As far as fertilizer policies and payments are concerned, the government is in continuous dialogue with all the stakeholders and various wings of the government.
"It is our effort that there is an adequate provision for fertilizer subsidy and payments to the industry are made promptly," he said.
However, there is a need to keep in mind the government's fiscal limitation in order to balance sometimes the "conflicting requirement' and meet the expectation of all stakeholders, he added.
The minister also urged the industry to redefine the role of fertilisers industry by introducing newer forms of fertilisers and lauded efforts of cooperative fertiliser firm IFFCO in developing 'Nano fertilisers'.
Speaking on the occasion, think-tank Niti Aayog member Ramesh Chand said there is a "disquiet trend in the fertiliser sector" as there is too much criticism about the soil nutrients which are essential for achieving food security.
He said that consumption of fertilisers in most parts of the country is much lower than the average and there is a need to dispel misconception surrounding fertilisers impact on environment and human health.
"Let us set perception right for growth of the agriculture sector and food security," he added.