labels: Fertilisers
Government slashes fertiliser prices under new policy news
12 June 2008

Mumbai: The government has approved a new fertiliser policy, offering an average reduction of up to Rs1,416 in the prices of certain fertilisers, finance minister P Chidambaram said today.

Under the new fertiliser policy government will switch to pricing fertilisers on the basis of their nutrient value rather than on the brands.

''The new pricing scheme for fertilisers will help lower prices of some varieties by an average Rs1,416 ($33) per tonne,'' Chidamabram said after a meeting of the cabinet committee on economic affairs (CCEA) presided over by Prime Minister Manmohan Singh.

Chidamabaram said the policy aims to reduce the over-dependency of farmers on a particular variety of fertilisers. He also ruled out any shortage of fertilisers.

''The government will ensure farmers are not dependent on the NPK and SSP varieties and move to complex fertilisers. This will maintain the balance in the soil,'' said Chidambaram. Prices of other fertilisers like urea would not change, he added.

Under the new policy, farm gate price of each nutrient will be uniform across all subsidised fertilisers and the selling price will be determined on the basis of nutrients contained in them.

''From product-based, we are moving to nutrient-based pricing. This will also bring down the prices of complex fertilisers,'' he explained.

The new policy envisages a uniform all India maximum retail price for single super phosphate (SSP) fertiliser based on the nutrient value.

The policy allows sharing the cost of sulphur by the farmer as a valuable secondary nutrient.

''The department of fertilizer will be authorised to revise MRP of SSP from time to time in future keeping in view the international price trend of sulphur,'' official sources said.

The cabinet also decided to fix the farm gate price of nutrients at the level of their existing price in straight fertilisers - Urea, DAP, MOP and SSP.

A government release said the rules will be notified within 15 days.

The new policy also provides for a uniform freight subsidy for all fertilisers, Chidambaram said, adding this will facilitate uniform availability of fertilisers.

The global rise in fertiliser prices comes as a serious challenge for the government to ensure availability of fertilisers.

The price of urea has gone up to $625 per tonne against $341 per tonne last year.

The industry sources blamed the government for the current fertiliser situation.

The centre is yet to clear the previous year's subsidy bill of the fertiliser-manufacturing companies estimated to be Rs40,000 crore, which has lead to a drastic cut in the fertiliser supply, industry sources pointed out.


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Government slashes fertiliser prices under new policy