Question : MRP of Fertilizers

Will the Minister of CHEMICALS AND FERTILIZERS be pleased to state:

(a) whether the chemical fertilizers under the subsidy regime are made available to the farmers at the Maximum Retail Price (MRP) fixed by the Government and if so, the reasons therefor;

(b) whether the fertilizers are not being provided by the agents at the price fixed for farmers and if so, the reasons therefor;

(c) whether lower global prices of nutrients as wt6ell as inputs/intermediates such as ammonia, phosphoric acid and sulphur has not translated into cheaper fertilizers for Indian farmers;

(d) if so, the details thereof during the last three years including for DAP, MOP and Urea and the steps taken by the Government in this regard;

(e) whether the fertilizer companies including the Madras Fertilizers Limited (MFL), Chennai are under-performing as against their installed capacity; and

(f) if so, the details thereof and the reasons therefor?

MINISTER OF STATE (INDEPENDENT CHARGE) FOR THE MINISTRY OF PLANNING AND MINISTER OF STATE IN THE
MINISTRY OF CHEMICALS & FERTILIZERS

(RAO INDERJIT SINGH)

(a) : Urea is provided to the farmers at a statutorily notified Maximum Retail Price (MRP) which is at present Rs. 5360/- per MT (exclusive of Central/State Taxes). An extra MRP of 5 % is charged by fertilizer manufacturing entities on Neem Coated Urea.
However, in respect of Phosphatic and Potassic (P&K) Fertilizers, the Nutrient Based Subsidy Policy is being implemented by the Government w.e.f. 1.4.2010. Under the policy, a fixed amount of subsidy, decided on annual basis, is provided on subsidized P&K fertilizers depending on their nutrient content. Under this policy, MRP is fixed by fertilizer companies as per market dynamics at reasonable level.

(b) : The Government of India has declared Fertilizer as an essential commodity under the Essential Commodities Act, 1955 (ECA) and notified Fertilizer (Control) Order (FCO), 1985 & Fertilizer (Movement Control) Order, 1973 under the EC Act. State Governments have been adequately empowered to ensure selling of fertilizers at MRP besides stopping black marketing/smuggling of fertilizers and no state government has reported selling of fertilizers above MRP.

(c) & (d) : As the prices of P&K fertilizers came down in the International market, the fertilizer companies reduced the Maximum Retail Price (MRP) of DAP, MOP and NPK Complex fertilizers by Rs. 2500/MT, Rs. 5000/MT and Rs. 1000/MT respectively during the month of June 2016again Rs. 1300/MT for DAP in the month of December 2016.Since Natural Gas/Naphtha is used as a feedstock for the production of ammonia used for production of urea, there is no impact of global prices of ammonia on the cost of production of indigenously produced urea. Moreover, urea is being provided to the farmers at a statutorily fixed price

(e) & (f): The details regarding the annual reassessed capacity and indigenous production of Urea, DAP and Complex Fertilizers for the 2015-16 to 2017-18 (upto November, 2017) is placed at Annexure I, II and III.Out of 30 urea manufacturing units, only 5 urea units viz., GSFC-Baroda, BVFCL Namrup-II, BVFCL Namrup-III, MFL-Manali and SPIC-Tuticorin had produced urea below their production capacity during the year 2016-17 due to technical reasons/other constraints. The main reason for low capacity utilization of Ammonium Sulphate by Fertilizers and Chemicals Travancore Limited (FACT) is Direct neutralization method and the financial crunch during 2015-16 which adversely affected procurement of essential raw materials.

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