Fertiliser imports

Reports indicate that the shortage of diammonium phosphate (DAP) right in the midst of the sowing period for the current rabi season was ...

Reports indicate that the shortage of diammonium phosphate (DAP) right in the midst of the sowing period for the current rabi season was the result of a distribution problem. Though there were sufficient quantities of the phosphatic fertiliser lying at the ports, they could not be efficiently transported to the regions where they were required.

In fact, according to the ministry of agriculture, DAP availability at 34 lakh tonnes is more than the projected requirement of 31 lakh tonnes for the current rabi crop.

The fact that despite the larger availability of DAP there was a situation of localised shortages brings to light the folly of depending on imported fertilisers. The argument that it may be far cheaper to import agri inputs like urea than to set up new units or expand existing capacities could be justified on the basis that it costs more to produce indigenously. Cheaper imports will ensure further that the government’s burgeoning subsidy bill can be brought under control. Consider, for instance,the case of DAP.

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While the price concession on indigenous DAP is Rs 4,000 per tonne, it is just Rs 2,500 per tonne on imported DAP. However, the impracticality of such a suggestion is evident in the fact that not only are the country’s port facilities inadequately equipped to handle large-scale import traffic, even the inland transportation infrastructure is ill-developed.

It may be argued that there is a definite case for taking care of these infrastructural bottlenecks. Yes, there is, but there is also a case for building efficient infrastructure for the transportation of natural gas into the country. Urea produced indigenously is expensive because of the non-availability of cheap natural gas. Once its availability is ensured, there will be little incentive to import.