Government raises subsidy on fertiliser

Fertiliser secretary, AV Gokak told reporters that the increase in subsidy on these decontrolled potassic and phosphatic fertilisers was aimed at ensuring adequate availability of the nutrients for the farmers.

The revised rates of concession during 1999-2000 to be effective from April 1, 1999 would be of the order of Rs 4600 per tonne on indigenous DAP, Rs 3200 per tonne on imported DAP and Rs 3250 per tonne on MOP.

8220;The rates of concession for complex fertilisers during 1999-2000 will range from Rs 2588 to Rs 4282 per tonne8221;, Gokak said.

He said an inter-ministerial group IMG has been constituted to examine the report of the Bureau of Industrial Costs and Prices BICP on thecost price study of DAP and MOP.

8220;This will decide the parameters to be adopted for computation of rates of concession for DAP indigenous for 1999-2000 with effect from April 1, 19998221;, he said adding the final rates of concession would be worked out on the basis of the report of the IMG.

Keeping in view fluctuations in the foreign exchange rates, Gokak said it was decided to index the concession rates on a quarterly basis to the actual behavior of the exchange rate.

The rates of concession have been fixed taking a foreign exchange rate of Rs 42.85 to a US dollar in the case of DAP indigenous and MOP and Rs 42.50 per dollar in case of imported DAP. These rates would be taken as the base for the first quarter of the current financial year.

The final rates of concessions for DAP imported and MOP for each quarter will be decided on the basis of the actual average exchange rate RBI reference rate relevant for the quarter taking into account only variations of 25 paise or more as compared to therate adopted for the previous quarters.

In the case of indigenous DAP, change in the exchange rate by Rs 1 to a US dollar would make a difference of Rs 230 per tonne in the cost of production and the rate of concession and quarterly indexing will be made on this basis, he said.

It is estimated that the demand for DAP will touch 31.39 lakh tonnes during the ensuing kharif season as against availability of 39.75 lakh tonnes and that of MOP at 13.38 lakh tonnes as against the availability of 20 lakh tonnes

The estimated requirement of urea fertiliser is put at 106.2 lakh tonnes as against an availability of 126.10 lakh tonnes.

Gokak stated that as much as 10.10 lakh metric tonnes of DAP and 6.03 lakh metric tonnes of MOP have been made available to the states till May 15. Import arrivals and despatches are being monitored closely so that no state experiences shortage of these fertilisers, he said.

Replying to a query, Gokak said the incentives given to fertiliser units would translate into benefits forthe farmers and said efforts of government in balancing the NPK nitrogen, phosphorous and potash consumption ratio had yielded results.

Production of urea and DAP stood at 192.91 lakh tonnes and 38.68 lakh tonnes respectively during 1998-99 as against its imports of 5.57 lakh tonnes and 21.05 lakh tonnes respectively during the period.

During the current financial year April-May 16 production of urea stood at 20.49 lakh tonnes and DAP at 3.93 lakh tonnes as against the target of 20.84 lakh tonnes and 4.50 lakh tonnes respectively.

The concession scheme on phosphatic and potassic P and K fertilisers was introduced from the 1992 rabi season to cushion the impact of decontrol which led to the increase in prices of P and K resulting in reduction of their consumptions.