The governmet has decided to lower the retail price of complex fertilisers. Under the new pricing mechanism, the prices of the nutrients -based fertilises may be broght down from the current level of Rs 8,100 to Rs 5804 a tonne except single super phosphate (SSP).
The differnece will be borne by the government. For this, the government is expected to announce a Rs 1,200-crore package for fertiliser manufacturers, said a senior official in the department of fertilisers (DoF).
The group of ministers, (GoM) set up to consider the concession scheme for phosphatic and potassic fertilisers, has given its nod to the proposal forwrded by DoF and the same will be placed before the Cabinet soon, he said.
The final concession rates will be worked out on monthly basis, based on the prioces of imported fertiliser products, raw materials for the preceedong month instead of on quarterly basis.
?For determination of the price will based on 12:32:16 formula that means a mix of urea, phosphate and potash respectively, instead of an earlier 17:17:17 product mix. In the new formula, content of urea will be lowered and the phosphate will be increased? an industry circle said.
The proposed move is likely to induce companies to broaden their product portfolio and offer customised value proposition products to farmers.
This will reduce the fertiliser prices from Rs 1,813 to Rs 900 per bag of 50 kilogramme. The new concession scheme has been prepared for only 11 varieties of fertilisers which will extended to all categories of the nutrients.
No doubt, the initiative will increase the subsidy burden on the governemnt, however, the application of micro and secondary nutrients suh as zinc, Boron, iron hinterlands alongwith urea, phosphate and potassic have shown significant increase in yields of cereals, pulses, oilseeds, vegetables?, industry experts maintain.
An increase in the concession rates will ease the supply position in hinterlands including Punjab, Haryana, Andhara and Tamil Nadu.