Deregulation of fertiliser prices in the new nutrient-based subsidy regime would be only to the extent that the cost farmers incur doesnt rise beyond a band. The government wont shy away from controlling prices,in case of steep increases in prices in the initial months of the new regime,a senior fertiliser department official told FE. Of course,subsidy adjustments will be the first choice of the government to reign in any sharp rise in prices of phosphorous and potash-based fertilisers after their deregulation from April 1. The government will,however,keep the option of using its legislative muscle to control retail prices if mere tweaking of the subsidy allocation doesnt work,said the official. Tweaking of subsidy amounts,along with occasional price adjustments of phosphorous and potash,are expected to reduce any likely pain to the farmer from deregulation,as the wild fluctuations in the global prices of the two fertilisers cannot be ruled out. Nearly 90% of phosphorous and all of potash needed in the country are met through imports. Subsidy adjustments are the easiest options,but if need be,the powers of the Fertiliser (Control) Order of 1985 can be invoked despite the de-regulation, the official said. While announcing the decision to free up retail prices of fertilisers last week,the government had stated it would make interventions to protect farmers,but did not clarify how. The Fertiliser (Control) Order (FCO) gives the government power to fix retail prices and revoke the licence given to producers and dealers for certain violations such as selling sub-standard or adulterated products,giving false claims about nutrients and selling fertilisers without showing the minimum guaranteed nutrient as a fraction of the total weight. FCO also allows the government to fix different retail prices for selling the same product in different locations or to different classes of buyers. After giving producers the freedom to fix retail prices of potash and phosphorous from April,the governments main concerns are in these areas non-supply to far flung areas,escalation in international price being passed to the local consumer,sale of products beyond printed price and selling poor quality fertilisers.
