AVAILABILITY OF FERTILIZERS

8.1.1 The availability of urea remained satisfactory throughout the year 1995-96. Against the allocation given by Department of Agriculture & Cooperation under the Essential Commodities Act, 1 955 for Kharif, 1 995 the percentage level of satisfaction was 101 % of the ECA, while it was 105% during Rabi 1995-96. The temporary problems of inadequate availability of wagons at certain loading points and directional constraints in rail movement experienced during Kharif'95 were considerably eased, but these were overcome during the following Rabi season. But for Bihar, where for a brief period during December the supplies were delayed on account of a strike at the Paradeep Port, no shortages were experienced during the season. The demand continued to be strong till January 1 996, after which it suddenly plummeted. The total sales during Rabi 1995-96 were almost at the same level as in the previous Rabi.

8.1.2 While the sales of DAP recorded a marginal decline during 1995-96 relative to the previous year, the sales of MOP recorded an impressive increase of 13.3% over 1994-95. The scheme of special concession on phosphatic & potassic fertilizers was continued during the year. The wide disparity in the prices of urea and the decontrolled phosphatic and potassic fertilizers, reinforced the preference of the farmers for urea which despite a sudden drop in demand during the later part of Rabi, registered a 6.8% annualised growth in sales.

8.1.3 In the expectations of a pick up in the sales of DAP the importers contracted very substantial imports particularly in the Kharif season 1995-96. The sales, during the year, however, registered a negative growth of 1.5%. With the indigenous production remaining buoyant, there was a heavy build up of the inventories of the imported as well as indigenous material. The same story was repeated in the case of MOP. Heavy imports during the year led to a pile up of the inventories as the growth in consumption did not match the expectations of the trade. The table given below gives the picture of availability and sales of 3 major fertilizers of urea, DAP and MOP during.1994-95,and 1995-96 :

(in Lakh MT)

** Decontrolled with effect from 25.8.1992

IMPORT OF FERTILIZERS

8.2.1  The demand-supply gap of fertilizers in the country is met through imports. The entire domestic requirement of potassic fertilizers is imported as there are no known sources of potash in the country. The availability of phosphatic fertilizers is also largely dependent on imports, either in the form of finished fertilizers or raw materials and intermediates. As regards nitrogenous fertilizers, the present indigenous production meets around 80% of the country's requirement.

8.2.2 Urea, DAP and MOP are the only fertilizers being imported in the country. The imports of urea are on Government account while the imports of DAP and MOP, which are decanalised, are largely on private trade account. Urea imports are being canalised through five agencies namely, MMTC, STC, PPCL, NFL and IPL. MMTC, which until recently was the sole canalising agency, retains its predominant position in urea imports. The other agencies have been inducted as co-canalising agencies to supplement the efforts of MMTC. The last to be inducted was IPL sometime during Rabi 1995-96. The arrivals of imports during 1995-96 were more timely than in 1994-95. Imports during the period April to January, 1996 totalled 32.63 lakh tonnes against 27.42 lakh tonnes during the corresponding period of 1994-95. Total imports during 1995-96 amounted to 36.63 lakh tonnes as against 28.70 lakh tonnes during 1994-95. Imports of DAP and MOP during the year were 14.06 lakh tonnes and 23.72 lakh tonnes respectively.

8.2.3  The figures relating indigenous production, imports and consumption of fertilizer nutrient-wise during the period from 1980-81 to 1995-96 an given in Annexure-X.

8.2.4  The total costs, inclusive of freight, of fertilizers imported on Government account and subsidy paid from 1989-90 onwards are indicated in the following table :

(Rs. in Crores)

* includes amount of Rs. 200.72 crore and Rs.181.49 crore as C&F value of MOP imported under bilateral assistance.

$ includes subsidy of Rs.15.08 crore and Rs. 4.64 crore in the respective periods for MOP imported under the / German Soft Loan.

PORT HANDLING

8.3.1 The imports of urea, which were resumed in 1991-92, have shown a consistently rising trend. From a level of 4 lakh tonnes in 1991-92 the imports increased to 28.70 lakh tonnes during 1994-95 and rose further to 36.63 lakh tonnes in 1995-96. Given the large volume of imports, the handling operations had to be organised at 12 ports on the West Coast and 11 ports on the East Coast. The operations were facilitated by the decision of the Ministry of Surface Transport to grant an 'ousting priority' for handling urea vessels at specified major ports during the peak handling period. A third of the total imports of urea was handled at Navasheva (JNPT) port, which is the only port in the country equipped to, handle gearless vessels of panamax type. Smaller vessels were optimally distributed over various major and minor ports on the two sea boards so as to minimise the lead time for movement to the consumption centres. The system of inter-agency coordination for facilitating the handling of fertilizer vessels at the ports and their equitable distribution to various states was further refined resulting in a significant improvement in the turn round of the vessels and evacuation of imported fertilizers from the ports.

MOVEMENT OF FERTILIZERS

8.4.1 Under the Fertilizer (Movement Control) Order, 1960, the primary responsibility of the Department of Fertilizers is to ensure adequate availability of controlled fertilizers in all the States. To achieve this objective, the movement of urea is programmed in accordance with the State-wise allocations made by the Department of Agriculture & Cooperation under the Essential Commodities Act, 1955 (ECA). The distribution of imported urea is made keeping in view the requirements of each State in time and space as well as the gap between demand and indigenous availability required to be met through imports.

8.4.2 The bulk of fertilizer movement is by the Railways which carry about 73% of the fertilizer produced and imported in the country. During the Rabi 1995-96 season, the level of movement by road had to be raised from 27% to 34% in order to accelerate the evacuation of stocks lying in the plant silos and the port.

8.4.3  Despite the tight demand supply balance of urea in the country during Kharif 1995 and early Rabi 1995-96 seasons, there was no increase in the average lead of fertilizer movement by rail. Since 1993-94, the average lead of fertilizer movement by rail, has progressively declined from 933 Km to 922 Km and finally to 920 Km during 1995-96.

The table given on next page presents the evolution of the average lead of rail movement since 1989-90 :

                                   (In K.M.)

8.4.4 In order to meet the requirement of the States, a close and effective interface was maintained between the Department of Fertilizers and the Ministries of Agriculture, Surface Transport, Railways and other agencies concerned with the supply management of fertilizers. The import arrivals were regularly monitored on a weekly basis during the peak season by an Inter-Ministerial group. A detailed plant and port-wise wagon plan was prepared to fine tune the planning and monitoring of urea despatches by rail. The concerted efforts made in this regard, resulted in record despatches of 20.1 lakh tonnes of urea during December 1995.

 FERTILIZER EDUCATION PROJECTS

8.5.1 Most of the fertilizer companies are carrying out agricultural extension work with emphasis on education of farmers in the scientific application of fertilizers. Some of the companies in the public and cooperative sectors are also implementing fertilizer education projects with foreign assistance. These projects are :

1. RAINFED FARMING PROJECTS (RFP) :

KRIBHCO is implementing Rainfed Farming Projects in Western and Eastern India. These projects aim at improving the livelihood of the poor families in the target areas through farming systems development and research, institution building and beneficiary participation for ensuring sustainability and replicability. Both these projects are being implemented in technical and financial collaboration with Overseas Development Administration (ODA) of the British Government. The Western India project is for a duration of 5 years beginning 1.1.1993. Out of the total project cost of Rs. 16.39 crore, Rs. 15.24 crore would be funded by ODA and the rest by KRIBHCO. The project is being implemented in the districts of Panch Mahal (Gujarat), Jhabua (Madhya Pradesh) and Banswara (Rajasthan). The Eastern India project will run for a period of 5 years from April, 1995. The total project cost is £ 8.591 million, out of which £ 8.091 million would be funded by ODA and the balance by KRIBHCO. The project is to be implemented in 1 2 districts of West Bengal, Orissa and Bihar.

   ii     INDO-CANADIAN AGRICULTURE EXTENSION PROJECT:

This agricultural extension project, assisted by Canadian International Development Agency (CIDA), is being implemented by M/s. Indian Potash Ltd. with the objective of improving agricultural production and general development of rural area, through extension and research services, spread over 1000 villages in the districts of Meerut, Barabanki and Sultanpur in Uttar Pradesh. CIDA has contributed commodity aid worth CDN $ 30 million for the project activities which were to be operative over a five period ending December, 1993. The project has been extended upto December 1996. The expenditure during 1995-96 was Rs. 46.65 lakhs.