COMMENTARY
INTERVIEWS
SPECIALS
CHAT
ARCHIVES

'Govt dithering over fertiliser subsidy caused DAP shortage'

Shortage of diammonia phosphate or DAP fertiliser that delayed the ongoing wheat sowing in Punjab, Haryana and western Uttar Pradesh was caused by the government's ''uncertain and whimsical policy'' in determining fertiliser subsidy, according to the Fertiliser Association of India.

V N Rai, chairman of the FAI which represents the domestic fertiliser industry, said in New Delhi that the government continued to dither on announcement of subsidy on the fertilisers that delayed the import of DAP. The fertiliser companies were not sure how much they would be entitled to, he said.

''The supply of fertilisers will not be adequate if its import and domestic production were not viable,'' Rai said adding the quantum of government concession was a major component in determining the viability.

Some companies were forced to cancel their import orders at the mature date with reduction or concession rates both on imported and domestic DAP for kharif crop which was earlier announced at Rs 4,000 per tonne on DAP, Rai said.

Besides, many fertiliser companies did not get subsidy from the government since January, making it difficult for them to sustain production, he said.

Rai felt that the consumption of fertilisers would not increase unless the supply got channelised through proper and timely announcement of subsidy on a long-term basis. This would in turn hit growth of foodgrains production affecting the country's self-sufficiency.

The FAI said besides reducing the concession rates, unilaterally taken by the agriculture ministry ''on extraneous considerations'' about Rs 8 billion dues of the fertiliser industry were locked up with the government.

The fertiliser industry is particulalry sore over the Hanumantha Committee recommendations for evolving a long-term, stable and coordinated policy on production, import and use of balanced fertiliser. The recommendations did not bring much hope to the urea segment and implementation of the policy package as suggested would seriously affect the health and growth of the industry, the FAI felt.

On the fertiliser scenario, the FAI chairman said the fertiliser consumption increased 14.31 million tonnes in 1996-97 to 16.19 mt in 1997-98, a record increase of 1.88 million tonnes which is the second best in the history of fertiliser use in the country, the last being 2.2. mt in 1988-89.

But, Rai said, the increase in fertiliser consumption did not result in corresponding increase in foodgrains production which had come down from 199.3 million tonnes in 1996-97 to 193.98 million tonnes in 1997-98. He attributed the fall in production to unusual rains and inclement weather.

On the production front, the FAI felt that nitrogen sector was doing well with a little setback on phosphatic area. Rai accused the government for its discriminatory treatment of SSP fertiliser industry in regard to fixation of selling price and concessional rates.

UNI

Business news