Context:
Rising geopolitical tensions and global supply disruptions are threatening India’s fertiliser supply chains, highlighting the need for a long-term strategy instead of short-term price controls. India’s heavy import dependence for fertilisers and raw materials raises concerns for food security and agricultural sustainability.
Key Highlights:
- High Import Dependence
- India imports about 25% of its urea requirements.
- Nearly 40% of fertiliser imports come from West Asia.
- Domestic urea production relies heavily on imported natural gas, with around 85% sourced from Qatar, UAE, Saudi Arabia, and Kuwait.
- Impact of Geopolitical Tensions
- Conflicts such as U.S.–Israel vs Iran tensions and Ukrainian drone attacks on supply infrastructure are disrupting global fertiliser supply chains.
- These disruptions are contributing to rising fertiliser prices and supply uncertainty.
- Price Controls and Rising Consumption
- The government has frozen retail prices at:
- Urea: ₹5,922 per tonne
- DAP (Di-ammonium phosphate): ₹27,000 per tonne
- Artificially low prices have contributed to overconsumption of fertilisers, with urea use rising from under 30 million tonnes (2017–18) to nearly 40 million tonnes.
Relevant Prelims Points:
- Urea
- Nitrogen-based fertiliser widely used to enhance plant growth and crop yield.
- Contains 46% nitrogen, making it one of the most concentrated nitrogen fertilisers.
- DAP (Di-ammonium Phosphate)
- A major phosphatic fertiliser containing nitrogen and phosphorus.
- Promotes root development and crop productivity.
- Agri Stack
- Digital ecosystem aimed at creating unique digital identities for farmers.
- Integrates land records, crop data, and farm inputs to enable targeted agricultural services.
- Fertiliser Subsidy System in India
- Government provides subsidies to keep fertiliser prices affordable for farmers.
- Urea is under price control, while phosphatic and potassic fertilisers operate under Nutrient-Based Subsidy (NBS).
Relevant Mains Points:
- Vulnerability of India’s Agriculture to Global Supply Shocks
- Heavy dependence on imported fertilisers and natural gas exposes agriculture to geopolitical risks and price volatility.
- Supply disruptions can affect crop production, farmer incomes, and food security.
- Environmental Concerns from Overuse of Fertilisers
- Excessive fertiliser use leads to:
- Soil degradation
- Water pollution
- Greenhouse gas emissions (nitrous oxide).
- Policy Distortions from Price Controls
- Subsidised prices encourage imbalanced fertiliser use, especially excessive nitrogen application relative to other nutrients.
- Structural Reforms Needed
- Promote balanced nutrient application and soil health management.
- Encourage nano-fertilisers and organic alternatives.
- Introduce consumption caps or targeted subsidies.
- Role of Technology and Data
- Agri Stack can enable precision agriculture and targeted fertiliser distribution.
- Digital platforms can guide farmers on optimal nutrient application based on soil health data.
- Way Forward
- Gradually shift from product-based subsidies to direct benefit transfers (DBT) for farmers.
- Promote balanced fertilisation through soil health cards and awareness campaigns.
- Diversify fertiliser import sources and boost domestic production.
- Encourage sustainable agricultural practices and integrated nutrient management.
UPSC Relevance:
• GS Paper III – Economy: Agricultural subsidies and input pricing.
• GS Paper II – Governance: Policy reforms in agricultural input management.
• GS Paper III – Environment: Sustainable agriculture and soil health.