Government modifies fertiliser pricing scheme

25 Jun 2009

1

The cabinet committee on economic affairs (CCEA) today approved modifications to changes in fertiliser pricing due to increase or decrease in prices of various fertilisers and fertiliser inputs, effective 1 April.

The CCEA also approved modification in the procedure of payment of subsidies (concessions) to ensure financial compliance and grouping of producers based on usage of fertiliser inputs to encourage inter-efficiency amongst indigenous producers.

The government has made it mandatory for fertiliser companies to fix the `maximum retail prices' at which phosphatic and potassic (P&K) fertilisers, to make fertilisers available to farmers at affordable prices and to protect them from price volatility in the international market. 

Under the revised guidelines, monthly rates of concession of di-ammonium phosphate (DAP), mono-ammonium phosphate (MAP), triple super phosphate (TSP) and muriate of potash (MOP) have been delinked from the average international price of the preceding month and the actual weighted average C&F landed price for the current month.

In case of raw materials/inputs for complex fertilisers, the one month lag, as at present, will continue, a government release said, adding, "This will rationalise the correlation of purchase prices of fertilisers and fertiliser inputs by Indian buyers in the international market."

Payment of subsidies for supplies of P&K fertilisers is now (from 1 December 2008) based on arrival/receipt of fertilisers in the district of a state against the earlier practice of release of payment on the basis of sales.

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