The previous UPA government introduced the so-called nutrient-based subsidy (NBS) regime in fertilisers from April 2010. The Narendra Modi government made it mandatory to coat all urea with neem oil since December 2015 and replaced 50 kg bags with 45 kg from March 2018. None of these measures — or even the much-talked-about Nano Urea — have succeeded in their stated goal of achieving balanced fertilisation. On the contrary, sales of urea, the primary cause of worsening plant nutrient imbalance and deteriorating soil health, have crossed an all time high 35.7 million tonnes (mt) in 2022-23. Urea consumption has gone up by over a third compared to the pre-NBS year of 2009-10. Far from discouraging nitrogen use at the expense of other primary, secondary and micro nutrients, farmers are over-applying urea. This, when there is clear evidence of declining nitrogen use efficiency and crop yield response to fertilisers.
The reason for such skewed nutrient use is simple: The maximum retail price (MRP) of urea has been unchanged at Rs 5,628 per tonne since November 2012. Given the corresponding per-tonne MRPs of Rs 27,000 for di-ammonium phosphate, Rs 34,000 for muriate of potash and Rs 28,000-31,000 for most complexes, why would farmers apply less urea? The various solutions currently offered — from Nano Urea to incorporation of compounds that reduce ammonia volatilisation and nitrate leaching — skirt the real issue of rampant overuse from underpricing. While diesel, petrol and LPG aren’t under-priced like before — they are, in fact, net taxed — urea has continued to be a political hot potato for successive governments. And one cannot expect anything substantial in this regard, till at least next year’s general elections.
There can only be one solution to the problem: Raising MRPs. This can be done by first bringing urea under NBS. Linking subsidy to the nutrient content of fertilisers wasn’t a bad idea. It failed because NBS excluded urea and was implemented only for other fertilisers. By allowing their MRPs to go up and simultaneously retaining control on urea, the cure proved worse than the disease. The government should do what it has done in other fertilisers: Decontrol MRP of urea and pay a fixed per-tonne subsidy linked to its nutrient content of 46 per cent nitrogen. In the long run, even the NBS should go and be replaced by a flat per-acre subsidy that could be given for every crop season. This wouldn’t penalise the serious farmer who takes more than one crop a year and, at the same time, applies fertilisers (including organic manures) judiciously.
