PM Modi inaugurates ‘One Nation, One Fertilizer’ scheme

Published
18th Oct, 2022

Context

Recently, the Prime Minister has inaugurated 600 Kisan Samridhi Kendras and ‘One Nation, One Fertilizer’ scheme to modernise agriculture.

About

One Nation, One Fertilizer Scheme has been launched with the Kisan Samriddhi Kendras functioning as the helping centers for farmers.
During the launch event, the 12th installment of the PM Kisan Samman Nidhi has also been announced.
Under the scheme, ?16,000 crores will be credited into the bank accounts of over 8.5 crore farmers.
The amount under the scheme would be credited directly into the accounts of farmers and there will be ‘no mediators’.

Need of the Initiative:

India is among the world’s largest buyers of fertilizer, besides China, Brazil, and the US.
India imports four types of fertilizers:
- Urea
- diammonium phosphate (DAP)
- muriate of potash (MOP)
- nitrogen-phosphorous-potassium (NPK)

One Nation, One Fertilizer Scheme:

The scheme will consist of a “Single Brand for Fertilisers and Logo” under the fertilizer subsidy scheme named “Pradhanmantri Bhartiya Janurvarak Pariyojna” (PMBJP).
The scheme would extend to all four fertilizers – Urea, Di-Ammonium Phosphate, Muriate of Potash, and complex NPK – with ‘BHARAT’ pre-fixed.
The single brand name would be BHARAT UREA, BHARAT DAP, BHARAT MOP, and BHARAT NPK, etc. respectively for all Fertiliser Companies, State Trading Entities (STEs) and Fertiliser Marketing Entities (FMEs).
Under the scheme, companies are allowed to display their name, brand, logo, and other relevant product information only on one-third space of their bags.
On the remaining two-thirds of the space, the “Bharat” branded Pradhanmantri Bharatiya Jan Urvarak Pariyojana logo will have to be shown.

Significance of the Scheme:

Uniformity: It will bring uniformity in fertilizer brands across the country.
Stop crisscross movements: It will stop the crisscross movement of fertilizers, especially urea. Which leads to its diversion for industrial purposes.
Brand-wise demand for fertilizers in specific areas by farmers is one of the reasons for the crisscross movement of fertilizers. Since fertilizer companies get the freight subsidy, they do not hesitate to move bags a longer distance.

Central government subsidy on fertilizers: The fertilizer sector is a highly subsidized area. Where the maximum retail price (MRP) is fixed for urea and subsidy is fixed for non-nitrogenous fertilizer phosphate and potassium (P and K). Nearly 80 percent of the cost of production of urea and P&K is being paid to fertilizer manufacturers in the form of a central government subsidy. As for freight subsidy, about Rs, 3,038 crores per annum for urea and Rs 3,300 crore per annum for P&K would be paid out this fiscal year.

Concerns associated:

It will disincentivize fertilizer companies from undertaking marketing and brand promotion activities.
Under this program, fertilizer companies are expected to get reduced to just contract manufacturers and importers for the government.
As of now, the company is blamed in case any bag or batch of fertilizer is not up to the standards. But after the scheme's implementation, the onus may be put on the government.