Fertilizer Manual Information
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REPORTOF THEWORKINGGROUP ONFERTILIZERINDUSTRY FORTHE TWELFTHPLAN(201213TO201617)
GovernmentofIndia MinistryofChemicals&Fertilizers DepartmentofFertilizers1
CONTENTS CHAPTER I II III Introduction ExecutiveSummary PerformanceofFertilizerIndustryduringEleventhFiveYear PlanPeriod IV V VI VII VIII HealthAssessmentofFertilizerIndustry ReviewofFertilizerPolicies Tax/DutyStructureonFertilizersandinputs GlobalDemandandSupplyScenario Assessment of All India, ZoneWise And StateWise Demand For Fertilizers During The 12th Plan And Upto 202425 IX Measures to Meet the Demand Increasing indigenous production, Joint Ventures Abroad and Long Term Offtake arrangements X Requirement of Raw materials, Intermediates and 128153 feedstock XI LogisticsandInfrastructurerequirementforMovementof Fertilizers XII XIII RevivalofclosedureaunitsofFCILandHFCL SubsidyonFertilizersProjections,Issues&targeted subsidy XIV XV XVI TechnologicalandR&DissuesrelatingtoFertilizerIndustry Newfertilizerpracticesandbalancedfertilisation Recommendations 180193 194212 213220 159168 169179 154158 106127 3954 5576 7787 8892 93105 SUBJECT PAGENO. 310 1124 2538
CHAPTERI 1.0 1.1 INTRODUCTION Chemical fertilizers have played an important role in making the country self reliant in food grain production. The role of Government of India has been significant as the Government has been consistently pursuing policies conducive toincreasedavailabilityandconsumptionoffertilizersataffordablepricesinthe country. It is for this reason that the annual consumption of fertilizers, in nutrient terms (N, P & K ), has increased from 0.07 million MT in 195152 to morethan28millionMTin201011andperhectareconsumption,hasincreased fromlessthan1Kgin195152tothelevelof135Kgnow. 1.2 Agriculture productivity is dependent upon various factors like soil properties, climateconditions,irrigationfacilities,seedqualityandvariety,croppingpattern, techniquesoffarming,preventionfrompestsetc,butmoreimportantlyusageof optimumprimary,secondaryandmicronutrients.Thus,theroleofGovernment becomes more significant in making available all types of nutrient at affordable pricestofarmersatappropriatetime. 1.3 For the Twelfth Five Year Plan i.e. from 201217, a working committee has been set up by Planning Commission under Chairmanship of Secretary (F). The composition and terms of reference of Working Group is mentioned in subsequentparagraphs. 1.4 CompositionofSubGroupsareasfollows: A) GroupI 1. ShriS.C.Gupta,JointSecretary(F&P)Chairman. 2. ShriR.G.Rajan,CMD,RCF 3. ShriK.C.Katta,CMD,PDIL 4. ShriB.D.Sinha,MD,KRIBHCO 5. RepresentativefromMinistryofPetroleum&NG. 3
6. RepresentativefromMinistryofAgriculture 7. RepresentativefromPlanningCommission 8. RepresentativefromONGC 9. RepresentativefromGAIL 10. ShriM.P.Johnson,DDG/DOF. B) GroupII 1. ShriSatishChandra,JointSecretary(A&M)Chairman. 2. Smt.NeeruAbrol,Director(Finance)/NFL 3. RepresentativefromMinistryofRailways. 4. RepresentativefromMinistryofShipping. 5. RepresentativefromMinistryofRoad&Highways 6. RepresentativefromPlanningCommission. 7. ManagingDirector,IFFCO 8. CMD,CoromandelInternationalFertilizersLtd. 9. CMD,GSFC C) GroupIII 1. ShriS.L.Goyal,JointSecretary(P&P)Chairman. 2. ShriA.K.Parashar,EconomicAdviser/DOF 3. ShriK.C.Katta,CMD,PDIL 4. RepresentativefromMinistryofAgriculture 5. RepresentativefromNCAER 6. RepresentativefromICAR 7. RepresentativefromPlanningCommission 8. ManagingDirector,TataChemicalsLimited. 1.5 TERMSOFREFERENCE 4
The terms of reference of the sub groups constituted under the working
committeeisplacedbelow: GroupI 1.5.1 Assessment of requirement of Raw materials/finished fertilizer to meet the demand of all types of fertilizers in the country including steps to increase indigenous production, with an objective to reduce subsidy levels. The Group mayincludebutnotlimitedtothefollowing: a) Toassesstherequirementofvariousinputsandinfrastructuralfacilitiesrequired during the next five years to fill the gap between demand and supply as far as possible and in the perspective of 15 years. This should also throw light on strength and weaknesses of our domestic industry that need strengthening, includingtechnologicalupgradation. b) To suggest the manner in which to meet the fertilizer demand, total and region wise,basedonacriticaltechnoeconomicanalysisofbuyversusmakeoptionsor strategic reasons and to suggest optimum level of indigenous capacity addition, after assessing the possible joint ventures by companies in countries having comparatively cheaper feedstock/energy sources; and to examine the need to proactivelypursuejointventuresofIndianentitiesabroad. c) To assess the feasibility of revival of the closed urea units of FCIL and HFCL, especially in the context of existing infrastructural facility, interest shown by certain fertilizer as well as nonfertilizer PSUs in their revival, scenario of availabilityofgasinfutureandparticularlywithreferencetotheneedforhaving productionintheeasternpartofthecountrytoreduceimportdependence. d) To assess the yearwise investment required to be made/being made by the public sector, cooperative and the private sector fertilizer units for augmenting their production capacity or modernization including investments for change overbytheexistingNaphtha/FuelOil(FO)/LowsulphurHeavyStock(LSHS)units intogasbasedproductionanditsstatusthereof. e) To assess the health of the fertilizer industry particularly, PSEs and to suggest measuresforimprovementsandmobilizationoftherequiredinvestments 5
GroupII 1.5.2 DemandProjectionandmovementofFertilizerstoendusersandtheuseofnew fertilizerpractices.ThefollowingscopewasincludedintermsofreferenceofGroupII: a) Toclearlyarticulatethemidandlongtermgoalsofthesector. b) To assess the region wise/statewise fertilizer demandsupply for the Twelfth Planandbeyond(intheperspectiveof15years); c) To review the status of the industry up to and during the Eleventh Plan period along with an analysis of growth in demand and demand production gap, feedstock/rawmaterialavailabilityandinfrastructurallimitations,levelofenergy efficiencyinproductioncomparedtobestunitsattheinternationallevel,impact of policy changes made during the period and status of joint ventures abroad with a view to ensuring security of fertilizers and fertilizer inputs for production inthecountry. d) To assess the feedstock / inputs limitations in general and measures to sustain thepaceofgrowthindomesticproductionoffertilizers; e) To review the present status of various taxes/duties, statewise, on fertilizers/raw materials and suggest measures for their rationalization, particularly in the wake of proposed implementation of Goods and Services Tax (GST) f) To assess the need for a fertilizer prices regulatory body in the Wake of opening oftheMRPsoffertilizers. g) The group may also make any other recommendations that may be considered appropriateforincreasingefficiency,reducingcostandimport,etc GroupIII
1.5.3 Technological and R&D issues relating to Fertilizer Industry and to suggest technological upgradation of the current industry to international standard. The Groupmayincludebutnotlimitedtothefollowing: a) To assess the current status of research and development in the fertilizer sector andareasofstrengthandweaknessincludingindustry'slinkageswithinstitutions forR&DandtoidentifynewthrustareasforR&D b) Toquantify'fundrequirementofR&Dandmeanstosourcethem c) TosuggestmeasuresforimprovingtheindustryinstitutionallinkageforR&D. d) Toreviewandsuggestmeasuresonthefollowingissues: i. ii. Efficientandbalancedusageoffertilizers; Agronomicalimportanceoflowanalysisfertilizers,speciallySSPaswellas thatofcitycompost,organicandbiofertilizers iii. Deficiencies of secondary and micro nutrients in the soil (other than NPK); iv. v. vi. vii. Productionanduseofbiofertilizers; Productionofslowreleasefertilizers; Decliningresponseratioofthesoiltothefertilizerapplication; Importanceofsoilmappingforsitespecificnutrientmanagement.
e) To assess the need for a regulatory body under FCO for fast track approval of newproductsforinclusionintheFCO. Reports of the Sub groups have extensively been used for discussion and finalization of theworkingGroupReport 1.6 1.6. XIIthPlanoutlookofFertilizerIndustry Thekeyissuesinfertilizersectorarematterrelatedto: a. Agriculturalproductivityandbalancedfertilization. b. Indigenousproductionandoverallsupplyoffertilizers. c. Fertilizersubsidy.
1.6.1 There is no denying the fact that over the years increased usage of fertilizer has played a significant role in increase of agriculture productivity. Current trends in agricultural output, however, depict that the marginal productivity of soil in relationtotheapplicationoffertilizersisdeclining.Thecomparativelyhighusage ofstraightfertilizers(Urea,DAP&MOP)asagainstthecomplexfertilizers(NPKs) which are considered to be agronomically better including low or non usage of secondary and micro nutrients has also probably contributed towards slowdown ingrowthofproductivity.Thedecliningfertilizeruseefficiencyisalsooneofthe factors for low productivity. The pricing of subsidized fertilizers is also probable responsibleforhigherusageofstraightfertilizersandskewedusageofnutrients. The manufacturers/importers were earlier not willing to fortify the subsidized fertilizers with secondary and micro nutrients, which are only required in nominal quantities as the additional cost for the same was required to be borne by them from their own return on fertilizer production. However, now the manufacturers / importers are allowed to charge 5% above MRP in case of fortifiedsubsidizedfertilizer(10%forzincatedureaandBoronatedSSP)andthus better availability of fortified fertilizers is being ensured by the suppliers. It is therefore more relevant in times to come for the Government to ensure balanced usage of fertiliz