Government hikes benchmark prices, subsidy for imported fertilisers

The government today announced an upward revision in the benchmark prices of phosphatic and potassic (P&K) fertilisers as also the `nutrient based subsidy' for chemical fertilisers, with effect from 1 April 2011.

This will enable manufacturers and importers to import fertilisers and fertiliser inputs and undertake domestic production, thereby increasing the availability of fertilisers for Kharif 2011-12, an official release said today.

While the cost of imported fertilisers will go up, the increased subsidy will bring post-subsidy maximum retail prices (MRPs) lower for farmers in the country, the release said.

The government has made a budgetary provision of Rs33,500 crore for P&K fertilisers for 2011-12, the total subsidy outgo on this score for 2011-12 will depend on the overall sale of fertilisers in 2011-12, the release said.

The department of fertilisers had, in March this year, announced NBS rates for 2011-12 so as to enable importers and manufacturers of fertilisers to enter into supply contracts and make fertilisers available to the farmers in 2011-12.

However, with tight availability of fertilisers and spiraling prices in the international market, fertiliser companies have reported their inability to finalise supply contract at the prices benchmarked for NBS 2011-12.

An inter-ministerial committee, which looked into the matter has recommended a revision in the benchmark prices for NBS 2011-12 to ensure availability of fertilisers. Accordingly, the department of fertilisers submitted a proposal for revision in the benchmark prices for NBS 2011-12, which was approved by the government.