December 5, 2024, was the 10th World Soil Day. Topsoil – two to three centimeters deep – which nature takes 1,000 years to create, is important: about 95 percent of the food produced today comes from it. The theme of this year’s World Soil Day was ‘Care for Soil – Soil Care, Monitoring and Management’ as our soil is becoming deficient in essential nutrients for healthy soil.
December 4 to 6 was also the time when the Fertilizer Association of India (FAI) organized its annual seminar on ‘Sustainable Fertilizers and Agriculture’. More than 1400 delegates from 20 countries participated in the seminar. The role of the fertilizer industry is critical in ensuring that our soil is healthy and well-nourished. Although high-yielding seeds of various crops are a catalyst for change in agriculture, they cannot give high productivity without nutrients, which are provided by the fertilizer industry.
Let us now turn to the role of the Indian soil and fertilizer industry.
Less than 5 percent of Indian soils are high or adequate in nitrogen, only 40 percent are adequate in phosphate, 32 percent are adequate in potash and only 20 percent are adequate in organic carbon. Our soil also suffers from deficiency of micronutrients like sulphur, iron, zinc, boron, etc. These deficiencies are moderate to severe. So, the Indian fertilizer industry has a big and important role to play.
It is heartening to see that India is a net exporter of agricultural products. Despite Covid-19, in the three years from 2020-21 to 2022-23, India exported around 85 million tonnes of food grains. This was after almost free grains (rice and/or wheat) were given to more than 813 million people. India is by far the largest exporter of rice in the world. Part of this success story is written by the Indian fertilizer industry. It has served yeoman to ensure that all key nutrients such as nitrogen (N), phosphate (P) and potash (K), and other micronutrients are produced domestically or imported in sufficient quantities, and are well distributed to our farmers. Give us high productivity in time.
Having said that, we must also say that all is not well with our soil or our fertilizer industry or our agriculture. There is a reduction of at least 30 percent, and even up to 50 percent in places. It needs to be filled late and a rich harvest will follow. Our mall sector survives on massive subsidies. It was Rs 1.88 lakh crore, which was about 4 percent of the federal budget of the last financial year. Urea, which carries nearly two-thirds of the subsidy, is produced mainly in granular form, and its price is regulated by the government at about $70 a tonne, the cheapest in the world by a wide margin. It has been stable for almost more than a decade.
In 2010, DAP and MOP were introduced under the nutrition-based subsidy scheme, but urea was left out. As a result the relative prices of urea, DAP and MOP were highly distorted in terms of application of these essential fertilizers. In most of the major agricultural states, N is being applied in excess of the recommended dosage, while P and K are under-applied. Punjab is a classic example where N, P and K have gone for a balance toss. As per the package of practices given by Punjab Agricultural University (PAU), Punjab is using 61 percent more N, 89 percent less K, and 8 percent less P than required, compared to the recommended doses. Similarly, Telangana is using it excessively. N by 54 percent but K by 82 percent less, and P by 13 percent less. The situation in other states is similar. As a result, farmers see more greenery in their fields, due to high application of N, but not enough grain due to relatively low amounts of P and K.
This highly unbalanced use of N, P and K, and neglect of micronutrients, leading to suboptimal results in agricultural productivity and thus farmers’ profitability, is primarily due to the fertilizer subsidy policy. Consider the fact that the nutrient use efficiency (NUE) of our current fertilizer applications is no more than 35 to 40 percent. The remaining amount of fertilizers, especially N, is going into the atmosphere as nitrous oxide, which is 273 times that of carbon dioxide. It is ironic that the heavy subsidy on urea is poisoning the environment rather than increasing rice production. On top of that, at least 20 to 25 percent of urea is being used for non-agricultural purposes and is leaking to neighboring countries. This must change.
The solution is to discourage the fertilizer sector from price controls. Farmers can be given an equivalent direct income transfer in the form of digital coupons to buy fertilizers. Regulating this industry on the basis of cement, diesel, etc. will make it better in terms of innovation and efficiency and more importantly will give right signals to our farmers to use N, P and K in right balance. Also, there is a need to promote the use of micronutrients to give the best results in productivity and farmer profitability.
But this improvement requires a lot of preparation. Triangulated data on fertilizer sales, soil health card (SHC), PM-KISAN, land records, crops, bank accounts and mobile numbers of farmers will be required. The central government should also communicate that these reforms are in the interest of farmers. The nation, the soil and agriculture will benefit from this and the fertilizer industry can take off just like the pharmaceutical industry for human health.
Gulati is Distinguished Professor and Research Fellow at Juneja ICRIER. Views are personal