UPSC Editorial Analysis: Fertiliser Shortages Amidst a Good Monsoon

*General Studies-3; Topic: Major crops cropping patterns in various parts of the country, different types of irrigation and irrigation systems storage, transport and marketing of agricultural produce and issues and related constraints; e-technology in the aid of farmers.*

Introduction

• Indian agriculture continues to be deeply dependent on monsoons. A good monsoon generally ensures higher sowing, better yields, and improved rural incomes.

• In 2024, India witnessed a second consecutive year of favourable rains, leading to significant expansion in kharif crop acreages, especially rice and maize.

• However, this optimism has been overshadowed by fertiliser shortages, particularly urea and di-ammonium phosphate (DAP). This situation exposes structural weaknesses in India’s fertiliser supply chain, excessive government controls, and global dependency.

Importance of Fertilisers in Agriculture

• Fertilisers are crucial for enhancing soil fertility and providing essential nutrients (nitrogen, phosphorus, potassium).

• Rice and maize, which recorded almost 10–12% acreage expansion this kharif, are highly nitrogen-demanding crops.

• Without adequate fertiliser application, even good rainfall cannot translate into higher yields. Thus, shortages directly threaten farm productivity and food security.

Present Shortage and Its Causes

• Supply-Demand Mismatch

• Urea stocks on 1st August 2024 were 57% lower than the previous year. Increased sowing under rice and maize sharply raised nitrogen demand, while acreage of pulses and oilseeds (low-fertiliser requiring crops) fell. Government failed to anticipate this demand surge.

• Urea stocks on 1st August 2024 were 57% lower than the previous year.

• Increased sowing under rice and maize sharply raised nitrogen demand, while acreage of pulses and oilseeds (low-fertiliser requiring crops) fell.

• Government failed to anticipate this demand surge.

• Decline in Chinese Exports

• China is a major global supplier of urea and phosphates. India imported 21.5 lakh tonnes (lt) of urea and 22.9 lt of DAP from China in 2023-24. In 2024-25, this plunged to just 1 lt of urea and 8.4 lt of DAP due to Chinese restrictions. Result: Heavy depletion of Indian fertiliser stocks.

• China is a major global supplier of urea and phosphates.

• India imported 21.5 lakh tonnes (lt) of urea and 22.9 lt of DAP from China in 2023-24.

• In 2024-25, this plunged to just 1 lt of urea and 8.4 lt of DAP due to Chinese restrictions.

• Result: Heavy depletion of Indian fertiliser stocks.

• Limited Diversification of Imports

• India could have sourced urea from West Asia, Russia, Nigeria, and DAP from Morocco, Jordan, and Tunisia. But procurement strategies were delayed, showing complacency.

• India could have sourced urea from West Asia, Russia, Nigeria, and DAP from Morocco, Jordan, and Tunisia.

• But procurement strategies were delayed, showing complacency.

Structural Issues in Fertiliser Policy

• Price Controls and Subsidies

• Urea price capped at ₹266.5 per bag since November 2012. DAP capped at ₹1,350 per bag. Prices are much below international market levels, discouraging production and import incentives.

• Urea price capped at ₹266.5 per bag since November 2012.

• DAP capped at ₹1,350 per bag.

• Prices are much below international market levels, discouraging production and import incentives.

• Canalisation of Imports

• Urea imports can be done only through state trading enterprises (STEs). This restricts flexibility and delays sourcing from alternative suppliers.

• Urea imports can be done only through state trading enterprises (STEs).

• This restricts flexibility and delays sourcing from alternative suppliers.

• Black Marketing and Diversion

• Artificially low prices make fertilisers prone to diversion into non-agricultural use (industrial sector, smuggling). Shortages result in long queues, distress sales, and black-market rates.

• Artificially low prices make fertilisers prone to diversion into non-agricultural use (industrial sector, smuggling).

• Shortages result in long queues, distress sales, and black-market rates.

Impact on Farmers and Food Security

• Farmers face long waiting hours and limited availability of fertilisers.

• Reduced application affects yields of rice and maize, impacting food security.

• Lower productivity will increase pressure on government procurement and buffer stock targets.

• Rising imports of food may worsen trade balance.

• Farmers’ trust in policy support also erodes.

Government Measures and Possible Relief

• India hopes for relief after China’s lifting of fertiliser export curbs following improved bilateral relations.

• Government is also attempting to streamline imports from alternative sources.

• Rabi season outlook is better as stocks may stabilise.

• However, long-term reforms are urgently needed.

Policy Reforms Needed

• Decontrol and Market-Based Pricing

• Allow fertiliser prices to be market-driven with government support for small farmers via direct benefit transfer (DBT) of subsidies. Example: Gas pricing reforms in urea production improved domestic output.

• Allow fertiliser prices to be market-driven with government support for small farmers via direct benefit transfer (DBT) of subsidies.

• Example: Gas pricing reforms in urea production improved domestic output.

• Decanalisation of Imports

• Allow private companies to import urea and phosphates, ensuring quicker supply adjustments. Encourage long-term import agreements with diverse countries.

• Allow private companies to import urea and phosphates, ensuring quicker supply adjustments.

• Encourage long-term import agreements with diverse countries.

• Strategic Reserves

• Maintain a minimum buffer stock of urea, DAP, and complex fertilisers for emergency use, like in foodgrain storage.

• Promote Balanced Nutrient Use

• Farmers overuse subsidised urea but underuse potash and micronutrients. Promote soil health cards, nano-fertilisers, organic alternatives to reduce excessive nitrogen dependence.

• Farmers overuse subsidised urea but underuse potash and micronutrients.

• Promote soil health cards, nano-fertilisers, organic alternatives to reduce excessive nitrogen dependence.

• Domestic Capacity Enhancement

• Boost investment in fertiliser plants through public-private partnerships. Explore renewable hydrogen and green ammonia technologies for sustainable urea production.

• Boost investment in fertiliser plants through public-private partnerships.

• Explore renewable hydrogen and green ammonia technologies for sustainable urea production.

Global Dimensions

• Fertiliser is a geopolitically sensitive commodity, with few countries controlling global supplies.

• Any export curb by China, Russia, or West Asia directly impacts India.

• India must pursue fertiliser diplomacy with producer nations to secure long-term supply contracts.

• At multilateral forums like WTO and FAO, India should argue for avoiding export bans on essential agricultural inputs.

Environmental Concerns

• Overuse of urea leads to nitrogen leaching, soil degradation, and water pollution.

• Current shortages may paradoxically push farmers to adopt organic methods or bio-fertilisers.

• Balanced fertiliser use is critical for sustainable agriculture under SDG-2 (Zero Hunger) and SDG-12 (Responsible Consumption and Production).

Way Forward

• India must shift from short-term crisis management to long-term fertiliser security strategy.

• A three-pronged approach:

• Policy liberalisation – decontrol prices, decanalise imports, rationalise subsidies.

• Diversification – secure multiple supply chains and encourage domestic capacity.

• Sustainability – promote efficient, balanced, and eco-friendly fertiliser use.

Only then can favourable monsoons be fully leveraged into enhanced productivity, rural incomes, and national food security.

Conclusion

• For agriculture to truly benefit from monsoon blessings, India must adopt bold reforms in fertiliser policy, ensure diversification of supply, and promote sustainable nutrient management. Otherwise, repeated shortages will undermine farm productivity, rural prosperity, and food security.

Discuss the structural causes of fertiliser shortages in India despite good monsoons. Suggest reforms for ensuring long-term fertiliser security. (250 Words)