Context:
Global geopolitical tensions, particularly in West Asia, are driving up fertiliser input costs, posing risks to India’s agriculture, subsidies, and food security.
Key Highlights:
- Price Surge Drivers:
- Rising costs of LNG, ammonia, sulphur
- Increased freight charges
- Impact on India:
- Expected rise in fertiliser subsidy burden
- Greater import dependence
- Energy Linkage:
- Natural gas supply to fertiliser plants improved from 60% → 75–80%
- Still vulnerable to global supply fluctuations
- Agricultural Implications:
- Potential increase in fertiliser prices
- Impact on farm productivity and input costs
Relevant Prelims Points:
- LNG (Liquefied Natural Gas):
- Natural gas in liquid form for transport and storage
- Ammonia:
- Key input in nitrogen-based fertilisers
- Fertiliser Types:
- Nitrogen (Urea), Phosphatic, Potassic
- Subsidy System:
- Government regulates fertiliser prices through subsidies
Relevant Mains Points:
- Supply Chain Vulnerability:
- Heavy reliance on imported inputs
- Exposure to geopolitical disruptions
- Economic Impact:
- Rising subsidy burden → fiscal stress
- Higher input costs for farmers
- Food Security Concerns:
- Reduced fertiliser availability → lower yields
- Potential inflation in food prices
- Energy-Fertiliser Nexus:
- Fertiliser production heavily dependent on natural gas
- Energy shocks directly affect agriculture
- Policy Challenges:
- Balancing subsidy burden vs farmer affordability
- Ensuring stable supply
- Way Forward:
- Diversify import sources and supply chains
- Promote green ammonia and fertilisers
- Enhance domestic production capacity
- Encourage efficient fertiliser use (nano-urea, precision farming)
- Build strategic reserves of key inputs
UPSC Relevance:
• GS 3: Economy – Agriculture, subsidies, supply chains
• GS 2: IR – Impact of global conflicts on domestic economy
• Prelims: Fertiliser inputs, LNG, ammonia