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Subsidy hike: Farmers wonder if it will translate into more fertiliser

Last year,a shortage of fertiliser availability had caused riots across the country.

Written by Express News Service | Pune |
February 17, 2009 1:25:37 am

Last year,a shortage of fertiliser availability had caused riots across the country. So does an increase in fertiliser subsidy by over Rs 20,000 crore in the interim budget mean that it will be easily available to farmers? This is what farmers in Pune region want to know.

“In the past three to four years,it has become extremely difficult to get fertilisers from the agents. If we ask for 20 bags (of 50 kg each),we get around 3-4 bags,” said Rajendra Chorage,who owns around 10 acres,30 km from Pune near Rathewade village.

This finds an echo in other farmers as well. “We can’t get fertiliser directly from the company as we consume in small quantities; we have to get them from the agents. Last season,because of the shortage,agents were selling a fertilizer bag with an MRP of Rs 510 at over Rs 800,” said Kishore Gamble,from the same village. Gamble requires 15 bags for his six-acre farm.

The interim budget has increased the fertiliser subsidy from Rs 33,000 crore in 2008-09 (expected to go up to Rs 1.2 lakh crore by March 31) to around Rs 53,000 crore; this has put the fertiliser industry in a generally optimistic mood. The subsidy money goes directly to the companies for them to be able to maintain the price line for fertiliser. Farmers,on the other hand,say a hike will make little difference unless it translates to actual increase in availability in fertilizers at the grass root level.

“Availability depends on the price of the raw material for fertilisers in the international market,” said A Venkatraman,Deputy General Manger,Zuari Industries Ltd. “One of the reasons why there was shortage last year was because of the constant fluctuation in the raw material price,” he said.

High international crude prices had driven the demand for bio-fuels last year,which led to an increase in demand for crops like corn leading to an increase in fertliser demand. Last year,China had stopped manufacturing some chemicals to control the pollution levels for the Beijing Olympics.

Further,the price of Sulphur – required to make sulphuric acid,an important fertiliser ingredient – had risen from $40 to around $800 (now back to $40).

“These factors led to some shortage in fertiliser and also resulted in an increase in the subsidy bill. Things should be better this year as prices started to cool around November; the demand for bio fuels has also reduced because of the drop in the international crude oil prices,” said Venkatraman. This is what is making the fertiliser industry more optimistic.

“If the current raw material prices can be maintained,then Rs 50,000-crore subsidy is a good amount,” said western regional head of the Fertiliser Association of India,D D Khose.

Farmers are not bothered about these details; they hope to get enough fertilisers this season.

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