The Food and Agriculture Organization (FAO) reports that global fertiliser usage is set to increase by a quarter by 2018 from the 2008 levels. By then, the world would be using over 200 million tonnes (mt) of fertiliser annually, with Asian nations using more than a third of it. The FAO report also notes that the fertiliser production potential will still have outstripped usage by that year, which means fertiliser prices—broadly lower than they were at the start of the decade (except for a spurt in 2011)—will likely remain lower. The FAO says that despite moderate increase in usage, South Asia will account for the bulk of nitrogen-based fertiliser consumed.
Given this outlook, it becomes imperative for India to adopt a well-considered decontrol strategy for urea. The heavy subsidising of the fertiliser has stoked overuse of urea in the fields, robbing the soil of its productivity by impacting its pH and causing an imbalance in NPK levels. Such indiscriminate use has also played havoc with water systems. With prices likely to flatten further, the urea overuse could get exacerbated. Subsidising urea has also fuelled its diversion to non-farm usage and it being smuggled into neighbouring countries, reducing the efficacy of the subsidisation itself. Besides, given India’s urea production has moved at a snail’s pace—between 2000 and 2012, it grew from 11 mt to just 12 mt—the country will see its import bill swell if the FAO projections come correct.
