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The Government of India implemented Nutrient Based Subsidy (NBS) Policy with effect from April 1, 2010 for decontrolled Phosphatic and Potassic (P&K) fertilisers excluding SSP for which it was affected from May 1, 2010. NBS is applicable for 25 grades of P&K fertilisers namely, Di-Ammonium Phosphate (DAP), DAP Lite, Muriate of Potash (MOP), 18 grades of NPKS complex fertilisers, Mono Ammonium Phosphate (MAP), Triple Super Phosphate (TSP), Ammonium Sulphate (AS) and Single Super Phosphate (SSP). NBS is paid on each nutrient per kilogram of N, P, K & S decided annually. The nutrient based subsidy, so decided by the government is converted into subsidy per tonne for each subsidised fertiliser.

The following are the details of the decision taken by the Cabinet on February 18, 2010 on the Nutrient Based Subsidy regime:
• The NBS will be applicable on DAP, MOP, MAP, TSP, SSP, and the 12 grades of complex fertilisers which are already covered under the current subsidy regime. Any variant of above fertilisers with other secondary and micro nutrients as provided for under FCO will be also eligible for subsidy. The secondary and micro-nutrient (expect 'S') in such fertilisers will attract a separate per tonne subsidy in order to encourage its application along with primary nutrients. The nutrient based subsidy, so decided by the government will be converted into subsidy per tonne for each subsidised fertiliser.

• The NBS to be paid on each nutrient, i.e. N, P & K and S, will be annually decided based on the targeted farmgate prices of fertilisers, total allocation of subsidy requirements of nutrients in the country as assessed by DAC and the expected international price of major fertilisers viz Urea, DAP and MOP. The expected international price will be based on preceding year prices and factor in any abnormal spikes.

• An IMC will be constituted with Secretary (Fertilizers) as Chairman and Joint Secretary level representatives of DAC. DOE, Planning Commission, Department of Agriculture Research and Education (DARE). This Committee will recommend per nutrient subsidy before the start of financial year for decision by the Government (Department of Fertilizers) and if required, review will be undertaken. The Committee will also recommend inclusion of new fertilisers under the subsidy regime based on application of manufacturers/imports and its need appraisal by Indian Council for Agricultural Research (ICAR), for the Government.

• The distribution and movement of Fertilisers along with import of finished fertilisers inputs and production by indigenous units will continue to be monitored through the on-line web based 'Fertilizer Monitoring System (FMS)' as being done currently under the concession scheme.

The NBS policy will also have the following additional elements:
• 20 per cent of the price decontrolled fertilisers produced or imported will continue to remain in movement control under the Essential Commodities Act 1955 (EC Act) DOF will regulate the movement of these fertilisers to bridge the supplies in underserved areas.

• Freight subsidy on decontrolled fertilisers will remain restricted to the rail freight. The road freight is assumed to be part of the fixed subsidy and the retail prices.

• The import of all the subsidised fertilisers including complex fertilisers will be placed under Open General Licence (OGL) in order to create sufficient competition at the farm gate level, which is necessary to ensure reasonable prices and sufficient availability. Import of Urea will remain canalised during the first phase. However, in order to protect indigenous industry, subsidy will not be applicable on imported AS during the first phase.

• Under NBS, though the market price of subsidised fertilisers except Urea will be determined based on demand supply balance, the fertiliser companies will be required to print the Retail Price (RP) on the fertiliser bags so that there is no abnormal profiteering in the trading channel. The applicable subsidy and net RP shall have to be clearly indicated on the bag. Any sale above printed net RP shall be punishable under the EC Act.

• Customised fertilisers and the fertiliser mixture industry which currently produces more than 15 Lakh Metric Tonnes (LMT) of soil and crop specific fertilisers in the country based on subsidised fertilisers as inputs will be able to receive subsidised fertilisers from the manufacturers/importers after its receipt in the districts. There would be no separate subsidy on sale of these fertilisers as they will be receiving subsidised inputs.

• A separate additional subsidy will be provided to indigenous manufacturers producing complex fertilisers using Naphtha based captive Ammonia to compensate for the higher cost of production of 'N'. However, this will be for a maximum period of two years during which the units will have to convert to gas or use imported Ammonia. The quantum of additional subsidy will be finalised by DCF in consultation with DOE, based on study and recommendations by the Tariff Commission.

• The NBS would be released through the industry during the first phase. It is proposed to release 85%/90% of the NBS based on proforma 'A' and the remaining 15%/10% based on the certification of receipt/sale in the district by the respective state governments/statutory auditor of the company, as being done under the current concession scheme.

The projections of fertiliser nutrients based on two different approaches show a range of demand figures of total nutrients between 33.5 and 33.8 million tonnes for the terminal year of 12th Plan. The demand forecasts for ‘N’, ‘P’ and ‘K’ are estimated at 200.35 LMT, 96.00 LMT and 41.74 LMT respectively in the terminal year of the Twelfth Five Year Plan. This corresponds to a demand of 336.77 LMT for Urea, 124.13 LMT for DAP, 47.93 LMT for MOP, 114.20 LMT for complex fertilisers and 59.48 LMT for SSP. This demand is based on current consumption patterns which might change in next five years depending upon increase in irrigation/crop pattern and change in percentage growth in agricultural production.

In the context of rapidly increasing food-grain production in the country, availability of around 340 LMTPA of urea is to be planned for. It is expected that over and above the present installed capacity of 238.52 LMTPA of urea (222 LMT from domestic units plus 16.52 LMT from OMIFCO), additional capacity is expected to come in the next Plan period as follows:

• 19.96 LMT capacity addition in the existing units such as KRIBHCO, RCF, NFL & Revival of Duncan Industries Ltd., Kanpur plant.
• 38.12 LMT from 3 brown field expansion projects and 12.71 LMT from one green field project.
• 12.71 LMT from revival of one urea units of HFC/FCI.

Gap of approx. 30 LMT to be met from JV projects abroad based on low price gas/LNG and imports. Few JV projects are expected to come up in the countries which have abundant reserves of gas with a buy back arrangement for urea produced by these projects.

Stagnation in Technological Front
It is agreed worldwide that, technology has reached its peak, especially with regards to process of manufacture. Whatever savings in energy consumption that can be achieved, can be in the following areas:
• Better efficiencies of machines
• Adopting plants of very high capacities
• Better Catalysts
• Higher plant ‘on stream’ factors

Research & Development Issues
There has not been much of change in R&D activities during last five years. The companies are mainly concerned with trouble shooting, technical audit and inspection exercises and other short-term problems.

Increasing trend in consumption towards balanced application led to improvement in N: P: K use ratio. The ratio had been 6.8:2.6:1 at the end of 9th Plan improved to 5.9:2.4:1 at the end of 10th Plan which further improved to 5.0:2.4:1 during the fourth year of the 11th Plan (2010-11). Per hectare consumption of fertilizer nutrients improved from 92.2 kg at the end of 9th Plan.

To make fertiliser use more effective and efficient, availability of good quality seeds, management of solid moisture through effective soil and water conservation measures, balanced and integrated use of all sources of plant nutrients and appropriate plant protection measures etc. are also equally important.

To produce more food grains and pulses, two options are available one is to increase area under cultivation and the other is to increase yield per unit area only the second option, that is to increase productivity per unit area is open to us. Higher yield means removal of more nutrients from the soil. The fertiliser application thus raises plant nutrient level of soil to sustain the crop production. Reaching fertiliser to consumers in 6.27 lac villages in India subcontinent is by no means on easy job. Under the diverse condition of consumption pattern from 2 kg/ha in Arunachal Pradesh to 158 kg/ha in Punjab, from plains of Utter Pradesh to Millie tract of North East, uneven spread of rail network and poor road condition the task of making fertilizer available in the length and breadth of this country is challenging.

The Super Phosphate (SSP) has come out to be accepted though out the world as reliable barometer of Agriculture activities especially for oil seeds, sugar cane, potato and garlicky as Basle fertiliser. SSP is indispensable in the widest sense in Indian Agriculture field. There is hardly any part of the country where SSP is not used to supply Phosphorus (P) as plant nutrient along with calcium and sulfur. The most important and valuable part of SSP (Chemically Ca3 (HPO4) 2 CaSO4) is its calcium and sulfur content along with phosphorous. These combinations of nutrient are available in straight fertiliser only.

The only alternative to reduce import burden of costly Diammonium Phosphate is to have more number of DAP plants in India or increase production and consumption of Super Phosphate in India. It appears uneconomical to have new DAP plants in view of high plant cost and production cost. The cost of DAP from new plants shall be too high without the support of the government of India. The only alternative is to boost up Super Phosphate manufacture. The inherent power of Super Phosphate due to its Calcium and Sulfur content has now started getting recognised by the institutions and farming community both.

The Super Phosphate industry only can make India self-sufficient in phosphatic fertilisers’ requirement in time to come. If proper attention is paid of following points:
1. Propagation of Super Phosphate as fertiliser of the time
2. Educating farming community throughout India by joint efforts of the government, Fertiliser Associations, and Industries together
3. Putting up new big size Super Phosphate plants in organized sector near the source of raw material
4. Improving technology for better capacity utilisation of the existing plants

Most of the Super Phosphate plants are in unorganised sector owned by individuals or in small-scale sectors. Such units have neither infrastructure nor capacity to spend on large-scale publicity, education programs Demonstration plots as compared to Urea and DAP manufacturers. In most part of Country, farmers are unaware of Super Phosphate, its usage. Super Phosphate manufacturer could not have linkage with such remotely located consumers due to their limited resources and lack of government support. Industries used to fight, for their survival in nearby market with each other, rather than exploring new market segments. Farmers depended on DAP are left with no other choice if it is not available or to pay high price if in short supply even though Super Phosphate is available abundantly.

The organized sectors producing Urea and DAP have created an environment with the help of their huge that Urea and DAP are the only fertilisers required for crops. This is good in the present competitive consumers market. But, our rural people still doesn't understand importance of other fertilisers, and are victim of this publicity gimmick. Therefore, farmer's education by nodal agencies, Institutions and gram development societies are essential. Who can explain them about other fertiliser also? They should also emphasis the importance of Super Phosphate as an alternative fertiliser. Fertiliser Associations should also campaign through their dealers training program, farmers training program. Such large-scale contribution by our teachers only can save our country from over dependence on a particular type of fertiliser. This will help to fill up the gap between supply and demand and also help in improving the health of the crop, which is otherwise suffering.

The manufacture of Super Phosphate is a simple of mixing Rock Phosphate and Sulfuric Acid. Plants can be installed with little investment of few crores only with no complicated. Technology as compared to Diammonium Phosphate plants. Super Phosphate plants can be erected in short time also. Organized sectors should put up plants having capacities more than 1000 TDP on coastal area or near the big smelters coming up in near future having Sulfuric Acid as by product.

Poor capacity utilisation is mainly due to (a) Lack of confidence among farmers about Super Phosphate and (b) Inefficient operation

It is essential to upgrade the technology adopted by small size plants to make it cost efficient. They have to incorporate latest developments in the field of Pollution Control, Grinding of Rock Phosphate and material handling equipment.

Units have to be quality conscious. It will be better, if they market their product jointly under one common brand. If Government of India give serious thought and account Super Phosphate as major supplier of P2O5, there is no doubt that increased capacity utilisation itself will help in reducing supply and demand gap, without much of capital investment.

Super Phosphate has another edge over DAP that it can be produced using waste Sulfuric Acid from Detergent plant, Chloro sulphuric Acid plants and refineries. Beneficiated Rock Phosphate obtained from low-grade phosphate Rock is another alternative of imported phosphate rock, which can be easily used for manufacturing of Super Phosphate.

Super Phosphate has very bright future in India provided joint effort is made to utilise its hidden benefits. Super Phosphate can help considerably in improving our level of self-sufficiency in fertilisers as represented by the share of domestic production in total consumption. It is because of:
(a) Farmers have very strong resistance to price increase and it is blessed by political support.
(b) Fertiliser prices are not decided solely on economic considerations. Urea dominates other fertiliser.
(c) Abrupt price like has negative effect on consumption. Therefore, continuous import of Urea cannot be ruled out.
(d) International price can be lower than domestic production cost to pose a serious threat to India's self-reliance on Urea.
(e) Self-reliance is a must to ensure food security.
(f) It is difficult to say at this point as to what will be the emerging scenario of fertiliser control region in near future on the long-term perspective. In the liberalised market economy these may not be the role of control enforced the continuation of promotional activities but in on innovative structured and cost effective manner will be essential. The SSP Industries has the capability to adopt to the new emerging scenario. Thus its active role in the active service to the former will play major role to establish itself in the heart of farmers.
Covered in CEW Jan. - 13 »