Centre steps in to roll back fertilizer prices

Move after meeting with manufacturers

Palakkad, Kerala, 08/12/2019: A Farm worker sprinkling fertilizer at a paddy field at Kodumbu near Palakkad on December 08, 2019. In a move to tide over the shortage in paddy seeds, which were aged in bulk during the back-to -back floods in the state, Kerala State Seed Development Authority (KSSDA) officials have initiated steps to procure more seeds from Palakkad. However, as late rain and heavy monsoon during the harvest season immensely brought down the quantity of seeds in Palakkad, the authorities may have to depend on neighbouring states or the National Seed Corporation (NSC). Annually, require around 8,000 tonnes of paddy seeds in the state, but the heavy rain in the region prevented the farmers in Palakkad from drying the seeds. Hence, this year we expect to procure only around 1,200 tonnes. Photo: K. K. Mustafah.

A day after fertilizer producers announced a sharp 46% to 58.33% hike in prices citing higher raw material costs, the Central government intervened on Friday to ensure a rollback even though fertilizer prices are no longer regulated.

Minister of State for Chemicals and Fertilizers Mansukh Mandaviya said prices would remain unchanged for now, after a ‘high-level’ meeting was held with the major fertilizer companies.

Opposition parties had termed the “unprecedented” hikes an insult to farmers protesting against the new agricultural laws.

U.S. Awasthi, CEO of the country’s largest fertilizer producer, IFFCO, stressed that the hikes were necessitated by a global surge in raw material costs.

He added that it was not a government decision as fertiliser prices are decontrolled.

The Centre’s intervention marked the second major reversal on economic policy effected amidst the ongoing Assembly elections in West Bengal, following the recent decision to suspend rate cuts announced on small savings instruments for the April to June quarter.

“In the present time, fertiliser production companies had raised the prices of various fertilisers like DAP and NPK. But the government held a high-level meeting with these companies and it has been decided at the meeting that the fertiliser prices will not be raised presently. The farmers will continue to get the fertilisers as existed earlier,” Mr Mandaviya said in a video message released in Hindi and Gujarati.

On Thursday, the country’s largest fertiliser producer IFFCO revised rates for a 50 kilogram bag of Di-Ammonium Phosphate or DAP to ₹1,900 from ₹1,200, effective April 1, and other companies followed suit. Prices of other complex fertilisers were raised by 46% to 51.9%.

Mr Awasthi had said on Thursday that the new prices are only tentative as international raw material costs have not been finalised. He had also said abundant stocks of fertilisers were available at old rates and the new prices were necessary for printing fresh bags being dispatched from its plants. “The material with new rates is not for sale to anyone,” he had pointed out in response to criticism.