Drop in nano-urea sales has fertiliser companies holding their breath

Nano urea sales dropped by a steep 43.2 per cent in FY24 from the previous year, despite production capacity rising by almost 59 per cent in that period

Launched with much fanfare, the much-touted nano urea seems to be losing its appeal among farmers, if sales numbers are any indicator. 

 

Data from the Fertiliser Association of India (FAI), shows that in FY24, nano urea sales dropped by a steep 43.2 per cent from the previous year, despite production capacity rising by almost 59 per cent in that period. 

 

Companies manufacturing nano urea sold around 21.3 million bottles of the liquid in FY24, down from 37.5 million bottles in FY23. Production capacity jumped from 169.5 million bottles to 269.3 million bottles.  

 

But faced with rising inventory and falling demand, total production of nano urea in FY24, was only 9 million bottles, almost 81 per cent less than the previous fiscal.  

 

A bottle of nano urea, which weighs about 500 ml, is equivalent to one 45-kg bag of urea.  

 

An adoption issue  

 

If veteran industry executives are to be believed, nano urea as a product has still not caught on with a wide section of farmers despite its multiple benefits and aggressive sales pitch; in some cases, companies are even selling combos of one bag of conventional urea with one bottle of nano urea. 

 

“I feel it has something to do with cost of labour and also myths surrounding its efficacy, though we all know that when compared to conventional urea, nano urea is much better in all respects,” a senior industry executive told Business Standard. 

 

He said in the traditional agriculturally intensive zones that include Punjab, Haryana, western Uttar Pradesh and coastal Andhra Pradesh, there is always a perennial shortage of labour and when cost of labour goes up farmers usually restrain from engaging in any activity that pushes up their cost. 

 

“Nano is a liquid application fertiliser and needs to be sprayed just like pesticides and insecticides and when labour availability is short such activities are hard to come by,” he said. 

 

One solution is application of nano urea using drones and the government’s aggressive push for use of drones for spraying liquid fertiliser could provide some succour, but adoption of the technique remains at a nascent stage. 

 

“Also, in many cases, as Nano urea is a foliar application where the liquid is spread on the leaves and upper part of the plants, farmers are apprehensive about whether it will have the desired impact, though we all know that foliar application leads to better nutrient-use efficiency (NUE) as compared to conventional forms,” another industry executive said. 

 

He said that urea is usually applied three times in a plant – the first dose is given on the soil when the plant has not germinated, and the second and third doses are applied when the plant grows. 

 

In the case of nano urea, the first dose isn’t possible or necessary because it has to be applied to the leaves, so only the second and third doses are required. 

 

 “To me the biggest culprit in slow adoption of nano urea by farmers is the underpricing of granular urea. Unless one stops selling granular urea at dirt cheap rates of just Rs 242 for a 45 kg bag while the actual cost is much more, no farmer will be encouraged enough to shift to anything new or innovative,” the executive said. 

 

Jumbo plans for nano urea 

 

Launched in August 2021 by IFFCO and Rashtriya Chemicals and Fertilizers Ltd (RCF), nano urea was presented as the final answer to the country’s multiple problems of declining soil fertility and extensive use of urea, among others. 

 

A plan was drawn up to scale up nano urea production in eight plants of IFFCO, National Fertilizers Limited (NFL), and RCF in various phases starting August 2021. Together, the three plants are expected to produce about 440 million bottles by November 2025. This would be the equivalent of almost 20 million tonnes (MT) of conventional urea. The country currently has six operational Nano urea plants with a combined annual capacity of 272 mn bottles. 

 

Also, few private companies have opted for commercial production, with most saying they need data for at least 4-5 years before taking the plunge. The bulk of nano urea production is through cooperative major IFFCO. 

 

India consumes around 35 MT of urea annually, of which domestic production is around 25-27 MT per year while the rest is imported. 

 

As per the plan formulated a few years back, extensive use of nano urea along with commissioning of new plants would lead to a situation where, over the next few years, India’s overall reliance on urea imports would reduce to a trickle. This, in turn, was expected to save foreign exchange of about Rs 40,000 crore per annum, government officials said.  

 

Nano urea’s application can also effectively lead to a reduction in soil, water and air pollution, which happens due to the overuse of chemical fertilizers, officials claim. 

 

However, four years down the line, nano urea usage has seen a drop even as urea imports stand at about 6-7 MT in FY24. 

 

Nano urea benefits and pitfalls 

 

To assess the effectiveness of nano urea, the government has conducted research trials with 20 ICAR research institutes and state agricultural universities across 43 locations on 13 crops since 2019-20 in different agro-climatic regions. Over 11,000 farmer field trials on 94 crops were also conducted in collaboration with Indian Council of Agriculture Research (ICAR)- Krishi Vigyan Kendra’s (KVKs). 

 

According to government reports, the studies showed an eight per cent increase in crop yields following foliar application of nano urea. The government also claimed that nano urea effectively fulfils the nitrogen (N) requirement of plants, given that it has a nutrient use efficiency (NUE) of more than 85 per cent. Nitrogen is absorbed by crops through roots when applied in the soil and through foliage when sprayed. 

 

The report estimated that application of nano urea on all crops would cut injudicious use of chemical fertilizers like urea by as much as 50 per cent. 

 

From a financial perspective, too, government officials claim that nano urea will lead to an increase in farmers’ incomes given it would entail reduction in input cost, higher crop yield and better prices because of higher quality crops.  

 

Officials also claim that as per some estimates, farmer income could jump by an average of Rs 4,000 per acre by using nano urea. 

 

In fact, such was the goodwill around nano urea that, within two years, companies have launched nano di-ammonia phosphate (DAP) with plans to expand the technology to nano zinc and even complex fertilisers. 

 

For the ongoing rabi season, the government has pegged the country's nano urea requirement at 23.6 million bottles, with Uttar Pradesh leading the demand at 4. 33 mn bottles, followed by Maharashtra (3.47 mn bottles) and Punjab at 2.08 mn bottles. 

 

Conflicting reports from the field 

 

A clutch of recent studies has shown that all is not good with nano urea. A two-year field experiment by the Punjab Agricultural University (PAU) released in January 2024 found that nano urea had a negative impact on rice and wheat yields (the two most widely grown crops in the country). 

 

It found a 21.6 per cent decrease in wheat yield and a 13 per cent decline in rice yield when nano urea was used instead of conventional nitrogen fertiliser. The grain nitrogen content in wheat, which is essential for protein production, was also found to be less on application of nano urea.