2010 rings in reforms for fertiliser sector

Fertiliser sector witnessed a major reform in 2010 with the government deciding to subsidise the farm input based on the nutrient content instead of individual products like DAP and potash.

The move is expected to result in a huge change in agricultural practices in the country, as farmers will switch to farm inputs according to the need of their soil, in sharp contrast to the excessive use of certain fertilisers earlier because of the subsidies given by the governmentHowever, according to FAI, there are certain lacunae in the NPS-III scheme, including non-recognition and non-updating of genuine production costs, delays in notification and disbursement of subsidies and non-reimbursement of a number of taxes and duties that companies are legally bound to pay.
"These resulted in large under-recoveries to urea units, not allowing even a few efficient and low-cost urea producers to earn responsible margins," it said.
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