Unaffordable Fertiliser prices

Unaffordable fertiliser prices
By Tahir Ali
DAWN, Monday, 19 Apr, 2010

THE prices of fertiliser have gone up in the market with the arrival of Kharif season in the Khyber-Pakhtunkhwa. Growers say that surge in prices of fertiliser, an important input in farm production, has become unaffordable for small cultivators.

They fear that its consumption in cultivation may drop considerably hampering the per acre crop yield. To avoid the situation, they have demanded sufficient supply of fertilisers at lower rates through an improved delivery system.

Abdur Rahim Khan, general secretary of the Sarhad Chamber of Agriculture (SCA), said farmers in the province were not getting fertilisers at subsidised rates.

“The government gives a subsidy of over Rs750/50kg on imported and over Rs300 on locally manufactured urea. The farmers complain that they are not getting any benefit. Instead, the commodity is being sold at much higher rates in the market. If the farmers do not get any benefit from the subsidy, then of what use it is,” he asked?

“Though there is no shortage of fertiliser in the market, the prices have gone up enormously during the last three months. Majority of the farmers are subsistence farmers who have no money to purchase expensive fertilisers. If the government does not intervene immediately, it may badly impact the sugarcane, maize and other Kharif crops, fruits and vegetables and bring down per hectare yield as well as result in under cultivation of land,” he asserted.

The consumption of fertilisers is determined by soil, water availability, price trends and supply position. But the price issue usually is the main factor. “The prices of urea has jumped from Rs730 to Rs840 per bag, DAP from Rs1,900 to over Rs2,600 while price of Zarkhez has gone up from Rs1,900 to Rs2,200 over the past three months,” Khan added.

According to the National Fertiliser Development Corporation, the monthly use of urea country-wide saw 8.8, 18.1 and 20.5 per cent decline from January to March as compared to the same period last year. The off-take of DAP dropped by 39.2 and 17.2 per cent in February and March as compared to previous Rabi season. Figures for Khyber-Pakhtunkhwa are not available but sources say the situation may have been even worse for the province.

Farmers’ awareness campaigns are not needed on the issue. “We know the importance of fertilisers. What we need is smooth, timely and cheaper availability of the commodity at the required time. Establishment of village agricultural centre, on the pattern of utility stores where all types of agricultural inputs are available to farmers, could solve the fertiliser supply problem,” said a farmer.

He said the government should try to improve the distribution mechanism. “For this, it should closely work with farmers’ representatives and bodies. The private fertiliser companies should ensure a strict supervision of their dealer network. This, of course, will also requires that agencies and dealers should be provided enough stock of the commodity,” he added.

A marketing department official of a fertiliser company said that there were no official or controlled prices for fertilisers as it was a de-regulated industry.

“Domestic production of urea is less than the demand. Therefore, it is imported and sold by the government itself through the National Fertiliser Marketing Limited (NFML). In case of delay in imports by the government, shortages may occur, resulting in higher rates in the market,” he added.

Regarding concerns that dealers are minting money by selling fertilisers at exhorbitant rates, he said the dealers were being monitored regularly and directed to sell products at company’s prescribed rates. “Any major irregularity or identification of any such an instance, results in strict action against the dealer which may lead to termination of his dealership. However, better planning and imports at right time by the government will ensure availability of urea at reasonable prices,” he said.

In Khyber-Pakhtunkhwa, the total off-take of urea and DAP for the coming Kharif season is estimated at 180,000 tons and 150,000 tons respectively. Federal minister for industries had told the Senate that the NFML supplied 41,956 metric tons of urea to Khyber-Pakhtunkhwa during September, 2008 to February, 2010. He said the body did not supply urea stocks to any area of FATA directly. However, he said, the NFML had 22 dealers in the province (in June 2003, there were 211 such dealers in the province).

The government has deregulated fertiliser imports and its prices. But it needs to revive provincial quotas, restore provincial supply organisations in the public sector. The general sales tax on all fertiliser products will have to be waived off.

The NFML should also open bulk stores in central and southern parts of Khyber-Pakhtunkhwa like those in Punjab and Sindh. This would facilitate the distribution system. It should also increase its coverage to more areas and assign dealership in other districts and Fata.

The federal government had decided to offer the commodity to farmers through farm services centres but limited membership, insufficient outlets and lack of money with the bodies killed the initiative in the bud. To improve distribution of fertilisers, the bodies need to have more membership and more funds,” argued a farmer from Charsadda.

In areas where there are no farm services centres, district offices of the agriculture department should serve as provisional centres for fertilizers sales. Direct sales of the commodity to farmers have also been exploited by influentials. To check black-marketing and smuggling of fertilisers, daily reporting of quantity details to the district coordination officers should be ensured.


About Tahir Ali Khan (Official)
I am an academic, columnist, and a social worker.

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