The agriculture ministry has approved commercial release of nano-diammonium phosphate (nano-DAP), which is expected to reduce subsidy and the import dependence on the fertiliser variety. Sources told FE that nano-DAP will be manufactured by India Farmers Fertiliser Cooperative (IFFCO) and Coromandel International, and an official notification will be issued soon.
The Indian Council for Agricultural Research had earlier recommended provisional release of nano-DAP for one year, following completion of biosafety and toxicity studies. Currently, the cost of one bag of conventional DAP is Rs 1,350, while the actual cost of a bag is Rs 4,000. The gap between actual cost and prices paid by the farmers is borne by the government under the fertiliser subsidy head.
Sources said IFFCO would be selling 500-ml bottles of nano-DAP costing around Rs 600-650, which will have the same effectiveness of a bag of conventional soil nutrient. “As we import substantial quantities of DAP, our import dependence on soil nutrient and the subsidy expenses would reduce,” an official said. More than half of the country’s DAP requirements are imported, and the main sources are West Asia and Jordan, while India imports about 25% of its annual consumption of urea.
Imports account for a third of domestic soil nutrients consumption of around 60 million tonne annually. Fertiliser minister Mansukh Mandaviya in December last year had stated that with the wider use of nano-urea and nano-DAP, the fertiliser subsidy incurred by the government could be reduced significantly over the next couple of years.
In June 2021, cooperative IFFCO launched nano urea in liquid form as an alternative to conventional urea. The commercial production of nano urea was commenced on August 1, 2021 by IFFCO and Rashtriya Chemicals and Fertilizers. Soil nutrient in liquid form provides nitrogen to plants as an alternative to conventional urea. A 500-ml bottle of nano urea is equivalent to a 45-kg bag of conventional urea.
Officials said the efficiency of nano urea is more than 80%as compared to around 40% of conventional urea. Use of nano urea increases yield by 3-16%.As per revised estimates, the fertiliser subsidy for the current fiscal is estimated at Rs 2.25 trillion, which is an increase of 39% over Rs 1.62 trillion in 2021-22. IT is mainly attributed to a spike in global prices of fertilisers and LNG, a key ingredient in the manufacturing of urea.
Rating agency Icra expects the fertiliser subsidy at around Rs 2 trillion in 2023-24. In case of urea, farmers pay a fixed price Rs 242 per bag (45 kg) against the cost of production of around Rs 2,650 per bag. The balance is provided by the government as a subsidy to fertiliser units.
The retail prices of phosphatic and potassic (P&K) fertiliser, including DAP, were ‘decontrolled’ in 2020 with the introduction of a ‘fixed-subsidy’ regime, as part of the nutrient-based subsidy mechanism announced by the government twice in a year.