Fertilizer Availability, Imports and Movement*

Availlability of Fertilizers

Controlled Fertilizers - Urea

8.1 The Availability of urea, which is the only fertilizer under price and movement control of Government, remained satisfactory throughout the season in Kharif 2000 and so far during Rabi 2000-01.

Kharif-2000

8.2 The opening stock of 23.20 lakh MTs as on 1.4.2000 coupled with indigenous production helped in progressively ensuring higher availability to the Stales throughout the season. The cumulative availability of urea at the end of the season was 119.65 lakh MTs against the assessed requirement of 107.6 lakh MTs for the season. There was 3.1 per cent decline in sales of 98.94 lakh MTs in Kharif 2000 over 102,14 lakh MTs sales of urea in Kharif 1999. The sales during Kharif 2000 were also lower than the estimation of 107 lakh MTs. This was mainly due to erratic rainfall during the season.

Rabi 2000-01

8.3 The requirement of urea for Rabi 2000-0l had been assessed at 107.65 lakh MTs envisaging growth of 6.1 percent over the consumption of 101.43 lakh MTs in Rabi 1999-2000. The requirement will be met fully from opening stocks of 20.91 lakh MTs and under RPS, an estimated production of 103.79 lakh MTs during the season. Thus cumulative availability of urea will be about 124.70 lakh MTs by the end of 31st March, 2001. No import of urea has been made for this Rabi.

Decontrolled Fertilizers - DAP & MOP Kharif 2000

8.4 In case of fertilizers other than urea, which are decontrolled, no allocation is made by the Central Government. However, since Kharif 1999, assessments of requirement of DAP and MOP was restarted to enable better monitoring of availability at the national level. The corrective steps are then planned and taken by buffer stocking of these fertilizers or by inducing further imports through regulation of the rates of concession.

8.4.2 DAP and MOP are the two major decontrolled fertilizers which are imported. In Kharif 2000, 5.70 lakh MTs of DAP and 13.96 lakh MTs of MOP were imported.

8.4.3 Imports of these fertilizers coupled with higher indigenous production of 23.83 lakh MTs DAP during April-September, 2000 and the opening stock as on 1st April, 2000 of 9.45 lakh MTs DAP and 4.23 lakh MTs MOP resulted in satisfactory availability of DAP and MOP in the country.

Rabi 2000-01

8.5 In the wake of abundant availability through opening stocks and continuing higher production of DAP, there had been no problems in meeting the requirement of DAP and MOP during Rabi 2000-0l. The indigenous production of DAP received a boost after the Oswal plant at Paradeep started production on 1st April, 2000. The production of DAP during the Rabi 2000-0l is estimated to be about 27.41 lakh MTs as compared to the production of 19.50 lakh MTs in 1999-2000.

8.5.2 Following table summarizes the season-wise position in respect of the availability and sales of the major fertilizers i.e. Urea, DAP and MOP during the last three seasons.

(Figures in lakh MTs)

*Including requirement of about 3 to 5 lakh MTs of MOP for manufacture of complexes.
**This was subsequently reduced to 99.42 lakh MTs.

Movement of fertilisers

8.6.1 Under the Allocation of Business Rules, the Department of Fertilizers has been entrusted the primary responsibility of ensuring the movement, distribution and allocation of controlled fertilizer, i.e. urea, from various plants and ports in accordance with the State-wise assessment made by the Department of Agriculture & Co-operation (DAC). The distribution of imported urea is made keeping in view the requirements both in time and space of each of the States.

8.6.2 The major share in transportation of fertilizers is of the Railways. During 1999-2000, Railways had moved about 79 per cent of the fertilizers produced and imported in the country. In 2000-01, so far, the demand of railway wagons for transportation of fertilizers has been met in full. During April-December 2002. 212.80 LMTs of fertilizers was moved by the Railways as against 244.10 LMTs in the corresponding period at 1999-2000.

8.6.3 Judicious management of the demand-supply balance has helped reduce the average lead of fertilizer movement by rail. As compared to the average lead of 854 Kms for full year in 1997-98, the average rail lead during 1998-99 was 826 Kms. However, in 1999-2000, it rose to 846 Kms and now it is estimated at 872 Kms during April-December 2000. The increase in the average rail lead during 1999-2000 was due to nation-wise truck operator's strike and higher imports and consumption of DAP and MOP compared to 1998-99. The increase in the lead during the current year is on account of the following two reasons:
(i) the entire requirement of urea in the country is met with indigenous availability from plants located mostly in the West and North; and

(ii) with the commissioning of the DAP plant at Paradeep, more than 70 per cent at requirement of DAP is being met from indigenous availability involving long haulages, whereas imported urea and DAP were used to be moved to coastal areas with economy in average lead.

8.6.4 The table below gives the average lead from 1989-90 to 2000-01 (April - December, 2000):

Import of fertilisers

8.7.1 Imports of urea on Government account are made to bridge the gap between the indigenous availability and requirement through designated canalising agencies like MMTC Ltd., State Trading Corporation (STC) and Indian Potash Ltd. (IPL). The other major fertilizers like DAP and MOP are freely importable on private trade account.

8.7.2 Due to adverse monsoon conditions, the sales of urea have shown a marginally negative growth in 2000-2001. Consequently, the entire requirement of urea could be met from domestic production and the opening stocks of nearly 23.50 lakh metric tonnes left over from last year. There were, thus, no imports of urea on Government account. Moreover, due to comfortable availability situation, even the manufacturers of complex grade fertilizers were encouraged to source their requirement from domestic urea production. Besides, exports of urea from the indigenous production were also allowed.

8.7.3 The details of total cost and freight value and subsidy on imported fertilizers said since 1989-90 are given in the table below:

Freight and Subsidy on Imported Fertilizers

(Rs. in crore)

*includes amounts of Rs. 180.79 crore, Rs. 236.95 crore and Rs. 132.02 crore as C&F value of MOP imported under bilateral assistance during 1993-94, 1994-95 and 1995-96, respectively.
**Spillover payment for previous year i.e. 1999-2000.

8.7.4 The Government had set up a Task Force to study the impact of removal of Quantitative Restrictions (QRs) from 1.4.2001 on the fertilizer sector and to evolve strategy for combating its adverse impacts, if any, under the Chairmanship of Sri A.V. Gokak, former Secretary, Department of Fertilizers. The Task Force had representatives from Department of Fertilizers, Ministry of Commerce, Department of Agriculture and Co-operation, Ministry of Petroleum & Natural Gas, Fertilizer Association of India (FAI), Confederation of Indian Industry (CII), Fertilizer Industry besides other experts in the field of WTO related matters. The Task Force submitted its report on Jan. 1, 2001 and the recommendations are under examination by the Department.

Fertilizer Education Projects

8.8 Most of the fertilizer companies are carrying out agricultural extension work with emphasis on education of farmers in the scientific application of fertilizers out of their own resources. However, Krishak Bharati Cooperative Ltd. [KRIBHCO), Indian Farmers Fertilizers Cooperative Ltd. (IFFCO), and Indian Potash Ltd (IPL) are also implementing projects with foreign assistance, details of which are given below:

Rainfed Farming Project (RFP)

8.9.1 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 search, institution building and beneficiary participation for ensuring sustainability and replicability. These projects are being implemented in technical and financial collaboration with the Department for International Development (DFID) of the British Government.

8.9.2 The Western India project phase-I which was launched from 1.1.93, has been completed on 31.3.1999. The Project was implemented in the Districts of Panch Mahal (Gujarat), Jhabua (Madhya Pradesh) and Banswara (Rajasthan). The total cost of Phase-I Project was Rs. 19.05 crore, out of which DFID's and KRIBHCO's contribution was to be Rs. 17.52 crore and Rs. 1.53 crore, respectively. With the successful completion of Phase-I, this Project has been continued from 1.4.99 as Western India Project (Phase-II) and is being implemented in Districts namely, Panchmahal & Dahod (Gujarat), Banswara & Dungarpur (Rajasthan), Jhabua, Dhar & Ratlam (Madhya Pradesh) at a total cost of Rs. 148.53 crore. Besides KRIBHCO, IFFDC is also a partner involved in the implementation of Western India Project (Phase-II). The break up of cost contribution (on cash prices basis) of various agencies involved in the Project is as under:

Project Cost

8.9.3 This project is to be implemented in a period of seven years commencing from 1.4.99 to 31.3.2006.

During the year 2000-01, an expenditure of Rs.205.73 lakh has been incurred till 30th September 2000. The cumulative expenditure incurred on this project from 1.4.99 to 30.9.2000 is Rs. 491.46 lakhs.

8.9.4 The Eastern India Project was initially planned for a period of 5 years beginning from 1.4.1995 which has further been extended till March 2003. The total cost of the project is Rs. 38.66 crore, out of which Rs.36.41 crore would be funded by DFID and Rs. 2.25 crore by KRIBHCO. The project is being presently implemented in 9 districts of West Bengal, Orissa and Bihar and it shall be further spread out to 12 districts of these states in a phased manner. An expenditure of Rs. 147.99 lakh has been incurred during the first six month of the current financial year 2000-01. The cumulative expenditure incurred on this project from 1.4.95 to 30.9.2000 is of the order of Rs. 1414.12 lakh.

Indian Farm Forestry Development Cooperative Project (IFFDC)

8.10 Indian Farm Forestry Development Cooperative Ltd., promoted by IFFCO is implementing a Farm Forestry Project in 6 districts of UP, MP and Rajasthan with the help of grants received from India-Canada Environment Facilities (ICEF). This project was initially approved for a period of 5 years beginning 1.4.95 but has now been extended up to 31st March 2002, The main objective at this project is to improve the productivity of degraded lands for the benefit of rural poor by the application of farm forestry system through village level cooperative societies and also to reclaim waste lands and marginal agricultural lands. Under the Project, 90 Primary Farm Forestry Cooperative Societies will he organised and 20,000 hectares of area will be brought under afforestation. The total project cost will be Rs. 35 crore out of which Rs. 3.15 crore is being contributed by ICEF and Rs. 3.5 crore by IFFCO.

Environment Improvement in Rainfed Areas Project (EIRAP)

8.11.1 Indian Potash Limited (IPL) has been implementing this Project since April 1996 in 30 villages each of Chhindwara District of Madhya Pradesh and Amravati District of Maharashtra. EIRAP is a comprehensive programme for sustainable improvement in the environmental quality of rainfed areas and reduction in the poverty through conservation, development and management of nature resources through community involvement. The objectives of the project are to conserve, develop and manage land, energy and water resources; to develop environment-related micro enterprises for income generation; to strengthen and create community based organisations for sustainable development through people's participation (both men & women) and to build expertise in IPL to conceptualise, plan and implement sound rural environmental protects. Under the Project, 60 Village Environment Committees (VECs) have been formed to run and manage the programmes on water, land and energy resources conservation and development practices. Environment Resource Centres (ERCs) have been established in 6 villages for dissemination of information on management of natural resources in target areas. Soil and water conservation practices such as Farm Bunding; Stone Bunding; Gully Plugs; Afforestation on Community and Private Lands; Nursery Raising; Composting; Water Harvesting Structure such as Check Dams/ Stop Dams, Water Reservoirs, Farm Ponds, Nala Dressing, Repair of old structures; Desiltation at existing structure; Lift/ Drip Irrigation; Energy Conservation through improved Chulhas, Solar Cookers, Bio-gas etc. and Training & Capacity Building of the Project Functionaries and local Communities; are some of the major activities being carried out under the Project.

8.11.2 The estimated cost of the Project is Rs. 15.00 crore of which Rs. 12.90 crore is to be funded by India-Canada Environment Facility (ICEF) and Rs.2.10 crore by IPL. The focus of the Project at present is on institution building, keeping in view sustainability aspects. The Project completion date is March 31, 2001.