‘One nation, One fertilizer’ Scheme

Published: 1st Sep, 2022

Context

The Ministry of Chemicals and Fertilisers announced to implement of One Nation One Fertiliser.

About

About the “One Nation One Fertiliser” scheme:

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

The scheme would be done by introducing a “Single Brand for Fertilisers and Logo” under the fertiliser subsidy scheme named “Pradhanmantri Bhartiya Janurvarak Pariyojna” (PMBJP).
The scheme would extend to all four fertilisers – 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 productinformation only on one-third space of their bags.
On the remaining two-thirds of the space, the “Bharat” brandand Pradhanmantri Bharatiya Jan Urvarak Pariyojana logo will have to be shown.

Government’s argument for introducing this scheme:

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

Central government subsidy on fertilizers:

The fertiliser sector is a highly subsidised area wherein the maximum retail price (MRP) is fixed for urea and subsidy is fixed for non-nitrogenous fertiliser phosphate and potassium (P and K).
- Nearly 80 per cent of the cost of production of urea and P&K is being paid to fertiliser manufacturers in the form of 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.

Drawbacks of the scheme:

It will disincentivise fertiliser companies from undertaking marketing and brand promotion activities.
Under this programme, fertiliser 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 fertiliser is not up to the standards. But after the scheme's implementation, the onus may be put on the government.

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