The prices of almost all the fertiliser used by Indian farmers have doubled in the last one year, threatening the food security in the country where organic farming is still in the nascent stage.
According to Union Ministry of Chemicals and Fertilsers (MoCF), the free-on-board (FOB) price of Di-ammonium Phosphate (DAP) has increased from $657 per tonne in 2007-08 to $1,200 per tonne in the present year. In 2003-04, the price of this fertiliser, which is a vital nutrient for crops to take root, was $239 per tonne.
Similarly, the price of urea, which is used as a nitrogen-release fertiliser in areas where cotton and grains are cultivated, too has increased in the international market. From $154 a tonne in 2003-04, the price of urea increased to $341 in 2007-08 and has shot up to $625 this year.
Same is the case with muriate of potash (MOP), which is applied at the seeding stage. MOP has seen a rise from $97 per tonne in 2003-04 to $263 per tonne in 2007-08 to $675 per tonne this year.
The increase in fertiliser prices has been attributed to the limited production sources of phosphate and potash across the world. While phosphate, which is a unrenewable source as it is mined, is manufactured as fertiliser mainly in the USA and Morocco, that of potash is largely imported from Canada.
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The wholesale prices of potash and phosphate have increased because of an increase in demand for fertiliser following the surge in demand for food in developing countries and shift towards cultivation of biofuel crops.
Though not much noise has been made over the happenings in the fertliser sector, the stark reality is that the rising prices would change the dynamics of the country's food security programme. A pointer to this, industry sources said, is the reluctance on the part of the fertiliser firms in the country to import raw material and the cry from several states including Karnataka over non-availability of fertiliser.
But what is compounding the situation is, Union fertiliser secretary J S Sarma said: "Along with the rising international prices, consumption of fertiliser is also increasing." While consumption of urea has increased 25 per cent during 2007-08 over 2003-04, DAP increased by 27 per cent and MOP by 41 per cent during the corresponding period. "This year, there will be a further increase in consumption," Sarma said.
However, the increase in demand and the rise in international prices will only bloat the Centre's fertiliser subsidy bill. The subsidy burden, which was Rs 15,779 crore in 2004-05, increased to Rs 40,338 crore in 2007-08 and is all set to touch Rs 1 lakh crore this year.
The government subsidises 65-85 per cent of the price of fertiliser, Sarma said before detailing statistics.