Why in News? 

• The government is expected to come out with a new fertilizer policy.
• A task force to examine the production and promotion of bio-fertilizer and organic fertilizers has already been set up under the NITI Aayog.

How much fertilizer does India consume?

• Total consumption of fertilizers between April and mid-December 2022 was 40.146 million metric tonnes (mmt), with production of 32.076 mmt and imports of 12.839 mmt.
• The gap between demand and production is met through timely imports.

How is fertilizers availability monitored?

• Some steps undertaken by the government to improve the availability of fertilizers include:

• Assessment of state-wise requirements every month;
• 100% neem coating of urea, which increases nutrient efficiency;
• Monitoring of crop yield and soil health; and
• Online monitoring of the movement of fertilizers through the integrated Fertilizer Monitoring System.

Impact of the current policy

• Heavy subsidies: This has prompted many farmers to use chemical fertilizers like urea, which leads to higher productivity, but affects soil fertility in the long run.
• Excessive and inefficient use of fertilizers: This leads to nutrient losses to the environment and could also result in drinking water contamination and impact human lives as a result of unsafe storage practices, as per a UN report.
• Emission causing: With the subsidy being released directly to companies, technology-inefficient companies are being protected causing carbon emission.
• While attempts have been made to reform the fertilizer policy, they had to be rolled back after pressure from various quarters.

Trend in government expenditure:

• Food subsidy: The government has spiked spending on food, fertilizer and fuel subsidy by nearly 70%.
• Increased expenditure: For 2023-24, the fertilizer ministry might seek budgetary support of ₹2.5 trillion subsidy – outgo for FY23 has already crossed ₹2 trillion.
• Increased import bill: Russia being a major exporter of liquefied natural gas -critical input for manufacturing of urea – has also led to higher prices.

Steps taken in 2022:

• Implementation of DBT: The department of fertilizers disbursed subsidies for urea and nutrient-based subsidy, and implemented direct benefit transfer.
• One Nation One Fertilizers Scheme: It also implemented the ONOF scheme which aims to ensure timely supply of fertilizers.
• Model fertilizer retail outlets: The existing village, block/sub district/taluk and district level fertilizer retail outlets are being converted into model fertilizer retail outlets.

Way forward:

• Promoting local fertilizers: Lower duty on imported phosphoric acid to raise the competitiveness of local fertilizer manufactures, and an incentive for promoting organic fertilizers, could be proposed.
• Bio-fertilizer and organic fertilizers: A task force on bio-fertilizer and organic fertilizers has already been set up under NITI Aayog.
• Curbing hefty subsidies: Considering the long-term interests of agriculture and the effects of using inorganic fertilizers, saving a huge amount on account of subsidy support is a step in the right direction.