Govt. directs fertiliser companies not to hike prices of DAP, other phosphatic nutrients

The government has allocated nearly ₹79,600 crore for fertiliser subsidies in the 2021-22 Budget

Fertiliser Minister Mansukh Mandaviya has directed all manufacturers not to increase retail prices of DAP and other phosphatic fertilisers as part of the government’s efforts to ensure the availability of crop nutrients at affordable prices during the ongoing Rabi season, according to sources.

The government, which increased subsidies on DAP and some other non-urea fertilisers, is unlikely to hike subsidies on non-urea fertilisers, they added.

According to the sources, the Minister has said the government will not allow any increase in retail prices of DAP and also not tolerate price "cartelisation".

In June, the Union Cabinet had raised the subsidies for DAP and some other non-urea fertilisers by ₹14,775 crore to keep the price of crop nutrients for farmers low despite the rising costs. The move was aimed at providing relief to the farmers amid the pandemic.

After urea, Di-Ammonium Phosphate (DAP) fertiliser is the most widely used one in the country.

The government had increased subsidies by 140% on DAP because of the surge in global prices. The subsidy for DAP fertiliser has been increased to ₹1,200 per bag from ₹500 per bag.

Farmers will continue to get DAP at the old rate of ₹1,200 per bag, the government had said.

One bag has 50 kg fertiliser.

The government has allocated nearly ₹79,600 crore for fertiliser subsidies in the 2021-22 Budget.

At present, the subsidy rates for N (Nitrogen) is ₹18.789, P (Phosphorus) ₹45.323, K (potash) ₹10.116 and S (sulphur) ₹2.374. The subsidy is for each kilogram of the fertiliser.

The NBS rate on P stood at ₹18.78 per kg last year.

The Centre is making available fertilisers, namely urea and 22 grades of P&K fertilisers (including DAP) to farmers at subsidised prices through fertiliser manufacturers/importers.

In the case of urea, the government has fixed the maximum retail prices (MRP) of urea. The difference between the MRP and the cost of production is reimbursed to manufacturers in the form of a subsidy.

The Centre announces Nutrient Based Subsidy (NBS) rates for P&K (Phosphatic & Potassic) fertilisers every year. The subsidy on P&K fertilisers is being governed by NBS Scheme with effect from April 1, 2010.

According to the government data, urea imports rose to 98.28 lakh tonnes in 2020-21 from 91.23 lakh tonnes in 2019-20.

Di-ammonium phosphate’s (DAP) imports stood almost flat at 48.82 lakh tonnes in 2020-21, against 48.70 lakh tonnes in the previous year.

Imports of MoP (Muriate of Potash) rose to 42.27 lakh tonnes, from 36.70 lakh tonnes; while imports of NPK fertilisers increased to 13.90 lakh tonnes from 7.46 lakh tonnes.

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