FAI to Discuss Fertilizer Industry Issues in its Annual Seminar

India, by 2050 will surpass China as the most populous country in the world, with an estimated population of over 1.67 billion. Hence the food security will remain an important national agenda for India as the need of food grains by 2050 will be 400 million tonnes against the current production of around 285 million tonnes.  In addition, the total fertilizer nutrients requirement is estimated to be around 60 million tonnes by 2050 as against the current nutrient consumption of 34 million tonnes. Energy consumption norms and modified NPS-III policy, the impact of energy reduction, share of domestic gas supply to the fertilizer companies and revival of 5 closed units of FCI and HFC, requiring investment of more than Rs.40,000 crores led Fertilizer Association  of India (FAI) to come out with a New Approach to Fertilizer Sector. FAI Annual Seminar 2019 will start on 2nd December and continue till 4th December 2019 at Hotel Andaz Delhi, Aerocity, New Delhi.

It is important to mention that the government spends a sum of Rs 70,000 crore towards fertilizer subsidy annually.

Farmers normally purchase fertilizers only twice a year — during Kharif and Rabi crop seasons. As a result, there is a gap of 6 to 8 months between the manufacture of the fertilizers and the purchase by the farmer, he said. “If earlier the company was paying Rs 50 per tonne as interest charges to the bank, now it pays anywhere between Rs 600 to 800 per tonne,” said  Satish Chander, Director General, Fertilizer Association of India during an interaction with the  media on the eve of FAI Annual Seminar that starts on December 2, 2019.

The payment due to fertilizer companies was calculated based on the receipt of material in the district. Now, with the introduction of DBT, this goalpost has been shifted to point of sale,” said Satish Chander.

According to FAI, a total of Rs 33,691 crore dues are pending as on November 1. Out of this, Rs 20,853 crore is under the DBT, and Rs 12,838 crore dues are outside the DBT.

The increase in working capital requirement and consequent increase in interest cost due to implementation of DBT is yet to be recognized in the urea policy. Urea units cannot recover this cost from farmers through increased MRP because MRP is fixed by the Government. Subsidy comprises 78 percent of cost of urea,  Chander  further added