India’s agricultural sector is grappling with a significant issue: a heavy reliance on nitrogen-rich fertilizers, particularly urea. This imbalance, driven by skewed subsidies, is not only making fertilizers less effective but also hindering crop yield growth. A new report from the Commission for Agricultural Costs and Prices (CACP) highlights these concerns amid national efforts to boost agricultural output and reduce imports.
For years, analysts have pointed out that the pricing structure of fertilizers encourages the overuse of urea, which is relatively cheaper compared to phosphorus (P) and potassium (K) based nutrients. This has led to widespread soil nutrient imbalances across the country.
The consequences are stark: lower crop yields, which in turn force India to depend on international markets for essential agricultural products like pulses and oilseeds. The CACP report, released in anticipation of the winter-sown season, emphasizes the growing inefficiency in fertilizer use, where more chemicals are required to achieve the same output levels.
While advanced techniques like drone application and fertigation are being adopted to improve fertilizer efficiency, the report notes that the declining fertilizer response ratio remains a persistent challenge.
Furthermore, the loss of soil organic carbon is leading to a continuous decline in soil fertility and, consequently, lower yields. The CACP, responsible for setting minimum support prices, detailed the prevalence of micronutrient deficiencies in Indian soils. On average, 43% of soils are deficient in zinc, with significant deficiencies also noted in iron, copper, manganese, and boron.
The nation’s food security is intrinsically linked to the effective availability of fertilizers. The government currently subsidizes a variety of fertilizers, distributing them to farmers through a network of outlets. These companies are then reimbursed by the government. Notably, urea alone accounts for approximately 70% of the total fertilizer subsidy expenditure.
In a move to reduce dependency on urea imports, India is expanding its domestic production capacity. Five new plants—in Gorakhpur (Uttar Pradesh), Ramagundam (Telangana), Talcher (Odisha), Barauni (Bihar), and Sindri (Jharkhand)—are set to collectively produce an additional 6.5 million tonnes of urea annually.