DAP threatens to go the onion way

While farmers in Rodh village in Haryana say that black-marketers are selling DAP at a premium of 50 per cent, in Rohtak, long queues can be seen in front of retail outlets selling DAP; angry farmers in Meham-Gohanablocked the road for two hours in protest. In villages in Ludhiana and Jalandhar, farmers are waiting for four to five days to get DAP, and that too in smaller quantities than demanded.

In other cases, where farmers are not getting DAP in time, they are being forced to extend their sowing season, which in most of the north-western states gets over by the end of the month, or in the first week of December. In Haryana areas such as Kaithal, Sirsa, Jind and Sonepat, for example, it is expected that the sowing will continue till the first week of January as against the normal December 15.

Though the government insists that the situation is well in control — Fertiliser Secretary A V Gokak says that the shortfall is around ten per cent — the Fertiliser Association of India says it’s around 20 per cent, and is likely to get worse with importers cancelling their contracts since imports are no longer lucrative.

At the heart of the problem is the fact that while the government announced an ad hoc subsidy of Rs2,500 per tonne for imported DAP (and Rs 4,000 for the local one), importers find that the subsidy isn’t large enough for them to sell at the government-fixed price of Rs 8,300 per tonne — the landed cost of imported fertiliser is around Rs 10,500 per tonne, and you have to add handling charges, local transportation as well other incidentals.

The FAI, in fact, estimates that around 1 lakh tonnes of DAP imports have been cancelled in the past few weeks by traders who feel that they will be making losses unless the subsidy is raised. When contacted by The Indian Express, Gokak agreed that the cancelled contracts could be even higher. What added to the problem was that, in August, Agriculture Minister Sompal had announced that industry would be free to set its prices for DAP. This encouraged traders to contract imports.

Just a month later, however, the government reversed its stand, and fixed retail prices at Rs 8,300 per tonne. Traders, however, continued to import, convinced that subsidies would beraised. With the government still not announcing a final, and higher, subsidy, the traders are now convinced that it is not lucrative any more. Of the total DAP consumption in the country, roughly a third is met by imports.

When contacted, J N L Srivastava, additional secretary in the Ministry of Agriculture said that the government was moving in additional DAP to all the northern states and that things would stabilise very soon. He said that against the expected demand of around 31.4 lakh tonnes that had been indicated by the states, the actual supply would be around 34 lakh tonnes.

While government officials say that small delays will not affect the wheat crop, what it will do, however, is to reduce farm profitability since farmers will once again have to irrigate their land, and will have to use both tractors and precious diesel for this. Right now, thanks to the unseasonal rains, the land is wet and ready for sowing.

Not surprisingly, chief secretaries from Punjab, Haryana and Uttar Pradesh havebeen making panic calls to the Fertiliser Ministry, to help get more supplies for their state. Chief Secretaries of Haryana and Uttar Pradesh came to meet Fertiliser Minister Surjit Singh Barnala last week to impress upon him their demands.