It has stated that in near future while the demand for chemical fertilisers in solid form may continue, challenges may come from greater demand for product mix like use of liquid fertilisers, micro-nutrients and bio-fertilisers. It has called upon those PSU units who have not gone for production of biofertilisers to avail of the one-time grant-in-aid of Rs 20 lakh for setting up a 150-TPA unit.

It has also suggested that the fertiliser PSUs and cooperatives should go for a package of services along with their products on the model prepared by Tata Chemicals, Babrala in which fertiliser dealers become the franchisee of the service centres set up for farmers. Facility for bulk blending and top dressing of fertilisers should be provided at the centre under the supervision of agronomists if the licence for blending has not been obtained by the company from the concerned state authority under law.

Though the ministry is yet to decide on the deregulation of urea prices, it has conveyed to the fertiliser PSUs and cooperatives that the present situation may not continue for long. They should be organisationally prepared to face pertinent challenges in event of total deregulation, especially competition in prices from abroad in marketing of all types of fertilisers.

The ministry noted that as a result of indirect control, the marketing of decontrolled fertilisers has so far continued without much change and more or less on the lines of the controlled fertiliser, urea.

The marketing of these fertilisers has not been exposed to any challenges or competition from abroad due to the government policy of maintaining differential in concession on sale for imported DAP vis-a-vis the indigenous DAP.

The logistics and the freight costs have so far been the guiding factors in the marketing of bulk fertilisers. However, after withdrawal of freight support, areas of marketing may undergo a change which may lead to increase in the share of road transport. The companies, therefore, shall have to resort to other innovative methods in marketing to reduce costs. This may include product-exchanges and division of marketing territories.

The ministry has suggested several key promotional activities in fertiliser marketing. The scope of agro-inputs services shall have to be extended from the current supply of fertilisers and soil testing to include sale of micro-nutrients, sprayers and farm equipment, seeds, pesticides, insecticides, agro-chemicals, training and dissemination of information to farmers through audio-visual means, computers and satellite imaging and preparation of input-output plans of fields, especially those of big farmers.

The success in marketing in the long run shall depend chiefly on the efforts made for `optimising the gains to farmers' by ensuring packages of services which will help in developing brand loyalty for the product.

In the cooperative sector, marketing may continue with similar back-up of agro services to be provided through the primary cooperatives. In states, where the primary cooperative network is weak, the multi-state cooperatives may have to consider relaxation of their bye-laws for marketing fertilisers and other products through their own farmer service centres or through private channels.

The ministry has also suggested fertiliser PSUs and cooperatives to redesign the packaging of their products like selling of 50 kg bags fertilisers in bigger bags. Smaller bags should, however, be designed for hilly areas to pick up demand.