Opinion All is not well with soil

Let us now turn to Indian soils and the role of the fertiliser industry.

Less than 5 per cent of Indian soils have high or sufficient nitrogen, only 40 per cent have sufficient phosphate, 32 per cent have sufficient potash and just 20 per cent are sufficient in organic carbon. Our soils also suffer from a deficiency of micronutrients like sulphur, iron, zinc, boron, etc. These deficiencies range from moderate to severe. The Indian fertiliser industry, then, has a massive and crucial role to play.

It is heartening to see that India is a net exporter of agri-produce. Despite Covid-19, in the three years from 2020-21 to 2022-23, India exported about 85 million tonnes of cereals. This was after giving cereals (rice and/or wheat) nearly free of cost to more than 813 million people. India is by far the largest exporter of rice in the world. A part of this success story is written by the Indian fertiliser industry. It has done a yeoman’s service in ensuring that all major essential nutrients like nitrogen (N), phosphate (P) and potash (K), and other micronutrients, are either produced at home or imported in sufficient quantities, and distributed to our farmers well in time to give us higher productivity.

Having said this, we must also say that all is not well either with our soils or our fertiliser industry or our agriculture. There is a slack of at least 30 per cent, and at places even up to 50 per cent. It is this slack that needs to be filled and richer harvests will follow. Our fertiliser sector is living on huge subsidisation. It amounted to Rs 1.88 lakh crore, which was almost 4 per cent of the Union budget of the last fiscal year. Urea, which bags almost two-thirds of the subsidy, is being produced primarily in granular form, and its price is controlled by the government, roughly at $70/tonne, which is the cheapest in the world by a wide margin. This has remained almost constant for over a decade.

While DAP and MOP, were brought under the Nutrient-Based Subsidy scheme in 2010, urea was left out. As a result, the relative prices of urea, DAP and MOP were highly distorted as was the use of these essential fertilisers. In most of the major agricultural states, N is being overused compared to the recommended dose, while P and K are underused. Punjab is a classic example where the N, P and K balance has gone for a toss. Compared to recommended doses, as per the package of practices given by Punjab Agriculture University (PAU), Punjab is using 61 per cent more N than is needed, 89 per cent less K, and 8 per cent less P. Similarly, Telangana is overusing N by 54 per cent but 82 per cent less K, and 13 per cent less P. The situation in other states is also similar. As a result, farmers see a lot of greenery on their farms, due to the high use of N, but not enough grain due to relatively lower doses of P and K.

This highly imbalanced use of N, P and K, and the neglect of micronutrients, leading to suboptimal results on agricultural productivity and thereby farmers’ profitability, is largely caused by the fertiliser subsidy policy. Think of the fact that the Nutrient Use Efficiency (NUE) of our current fertiliser use is not more than 35 to 40 per cent. The rest of the fertilisers’ quantity, especially N, is going into the atmosphere as nitrous oxide, which is 273 times the carbon dioxide. It is ironic that the massive subsidy on urea is actually creating more poison in the atmosphere than increasing grain yields. On top of this, at least 20-25 per cent of urea is being diverted to non-agricultural uses and also leaking to neighbouring countries. This must change.

The solution lies in deregulating the fertiliser sector from price controls. Farmers may be given equivalent direct income transfers in the form of digital coupons to buy fertilisers. Deregulating this industry on the lines of cement, diesel, etc, will make it much better in terms of innovation, and efficiency, and more importantly give the right signals to our farmers to use N, P, and K in the right balance. Also, we need to promote the use of micro-nutrients to give the best results in terms of productivity as well as farmers’ profits.

But this reform will require a lot of preparation. Triangulating data on fertiliser sales, soil health cards (SHC), PM-KISAN, land records, crops grown, bank accounts and mobile numbers of farmers would be needed. The Union government will also have to communicate that these reforms are in the farmers’ interest. They will gain from it, as would the nation, its soils and agriculture, and the fertiliser industry can fly like the pharma industry for human health.

Gulati is Distinguished Professor and Juneja a Research Fellow at ICRIER. Views are personal