Govt makes change in urea policy to enable units produce more

The government today approved amendments in the urea policy 2015, enabling manufacturers to produce additional quantity as part of its objective to boost domestic output of this key nutrient.

"The Cabinet Committee on Economic Affairs has given its approval for amendment in Para 5 of New Urea Policy (NUP) - 2015 relating to the production beyond Re-Assessed Capacity (RAC) and inclusion of Para 8 in NUP-2015," an official statement said.

These amendments will protect the production beyond RAC by the urea units and are expected to boost indigenous urea production in the country, it added.

The ceiling imposed on production beyond Re-Assessed Capacity during 2016-17 has been raised so as to enable all urea unit to produce additional production which otherwise they were not able to do so due to low Import Parity Price.
 

"All stakeholders namely farmers, urea manufacturers and the government would be benefitted from the amendment," the statement said.

At present, the country produces over 24 million tonnes of urea annually and imports about 8 million tonnes to meet domestic demand. Imports are likely to fall this fiscal.

"Further, to address any future fluctuation in Import Parity Price that would have adverse impact on the production beyond RAC by urea units, Department of Fertilizers has been authorized to take appropriate decision in consultation with Department of Expenditure," the statement said.

The New Urea Policy - 2015 was notified on May 25, 2015 with the objective of maximising indigenous urea production, promoting energy efficiency in urea units and rationalising the subsidy burden on the Government.

The government has made it mandatory for all indigenous urea producers to neem coat 100 per cent of their production of urea to promote balanced use of fertilizers, increase nitrogen use efficiency and prevent diversion of urea for the purpose other than agriculture.

Urea is a controlled fertiliser and is sold at a fixed selling price of Rs 5,360 per tonne. The difference between cost of production and selling price is paid as subsidy to manufacturers.