Concluding remarks on Indian Fertilizer Industry

The Indian fertilizer industry has helped in the growth of the Indian economy. The fertilizer sector by enhancing the agricultural productivity has in turn resulted in providing a major support to the farmers who are primarily dependent on agriculture. Fertilizers have also played a pivotal role in India’s food Security.

[br]

For the Indian government, food has been the primary objective owing to its huge population. In India, therefore the fertilizer industry has wielded immense influence, like no other sectors in India. To cater to the needs of the individual, government top priority has been towards production of food grain. Since the poor farmers could not afford to buy expensive fertilizing agents, the government’s interventionist policy helped in providing the farmers fertilizers at a reasonable cost. The government formulated the Retention Price-Cum Subsidy scheme which has been a major impetus for the fertilizing industry since 1977 to 1992.

The following data compares the consumption against the production of fertilizers in India over the years.

Increase in fertilizer consumption:

• 1950-51: .07mn Mts
• 1975-76: 2.9mn Mts
• 2005-06: 20.3mn Mts

Increase in fertilizer production:

• 1951-52: .04 million Mts
• 1975-76: 1.8mn Mts
• 2005-06: 15.5mn Mts

These periods also witnessed a rapid increase in food grain production, which was estimated to be initially 121 million tons from 52 million tons and finally increased to 208 tons.

At present the government has formulated a new pricing scheme (NPS) replacing the RPS. The fertilizer industry of India is not same in terms of stock, its yield, and technology. Because of this, the urea plants have been assorted into groups to reduce them from being diverse and incomparable under the NPS scheme. The NPS has been modified, promoting further investment in the Indian fertilizer sectors.

The Fertilizer Association of India (FAI) has been set up a model which is based on several factors that include fertilizer prices, high yielding areas, irrigated areas, fertilizer nutrient prices and previous years’ fertilizer consumption. An estimate of the demand and supply till the end of the 11 th five year plan is given in the chart below:

[br]

Year	Supply N+P	Demand N+P+K	Demand Supply Gap N+P+K	Demand of K
2007-08	16950	23125	8835	2660
2008-09	17585	24085	9305	2805
2009-10	18595	25035	9405	2965
2010-11	19912	25960	9178	3130
2011-12	19965	26900	10235	3300

Today, India stands as the third largest fertilizer consumer and producer of the world. It has been observed that the subsidies on Indian fertilizer have been rising at constant rate. This is due to the rise in the cost of production and the inability of the government to raise the maximum retail price of the fertilizers. The population of the country is rapidly increasing at 1.5% annually. This requires higher production of food grains. The total cropped area is only 30% of the net geographical area, which is not enough for increasing the agricultural productivity. Now, the main focus is on the improvement of the farm income, for which the fertilizer industry needs to lay more stress on the agricultural activities in the country. This will also help to improve terms between the government agencies and the fertilizer industry in India.