Indian parliamentary panel questions Govt on accuracy of fertilizer demand estimate

The Parliamentary Standing Committee on Chemicals and Fertilizers has questioned the accuracy of the Government’s estimate on fertilizer demand.

According to a report of the Standing Committee, when it pointed out media reports on farmers purchasing DAP at ₹1,600-1,700 per bag when there was a reported crisis in November, the government said the availability of DAP in the country remained comfortable during October 2024.

According to the Fertilizer Ministry’s latest data, the total sales of urea, DAP, MOP and Complex fertilizers during October-November were 124.51 lakh tonnes (lt) against an estimated demand of 155.12 lt, showing a gap of 30.61 lt.

Demand-supply gap

This shows a large difference between demand and sales of fertilizers during first two months of rabi sowing season, amid several reports of shortages and black marketing. However, the government has claimed adequate availability of fertilizers.

In case of urea, the gap was 18.36 lt as sales were 59.07 lt against 77.43 lt demand. The gap was 7.01 lt in DAP (sales 27.82 lt against 34.83 lt demand), 0.73 lt in MOP (sales 4.98 lt against 5.71 lt demand) and 4.51 lt in complex (32.64 lt against 37.15 lt demand).

“Against the monthly requirement of 18.69 lt of DAP assessed by the Department of Agriculture and Farmers Welfare, the availability of DAP was 22.88 lt. Further, sales of DAP during October was only 11.48 lt,” the government said to the panel.

The Committee observed that low sales of DAP point towards veracity of the news report indicating that despite availability of stock, farmers faced problems in procurement. “The Committee, therefore, strongly emphasise that the Department should review their supply and distribution mechanisms to ensure that the fertilizers reach at the allocated destinations in all the districts well in advance and not less than 15 days before the start of the rabi and kharif seasons. The Committee desire that supplies be spruced in the cropping seasons through buffer stock in States itself to obviate scope for such incidents in future,” the report said.

‘Unrealistic requirement’

In reference to recoveries of ₹3,980 crore during 2023-24 due to expenditure incurred on anticipated urea import, the panel said it was due to placement of an “unrealistic anticipated requirement of urea” of 80 lt. But the Department of Fertilizers said “it was based on the monthwise assessment of inputs from Departments of Agriculture and Farmers Welfare of the State.”

As the actual import of urea depends on the gap of demand and indigenous production, the panel said apparent gaps in acquiring inputs, assessments and demand for imports vis-a-vis indigenous production figures and the explanation of the Department of Fertilizers is not convincing.

An official source in a State government said the demand for fertilizers is always kept at a higher level considering the Centre may not ensure the entire and timely availability. He said since farmers directly hold the State officials responsible, they try to always have some buffer to accommodate demand. He also cited an instance when a State government’s demand estimate went completely wrong, when it was intended to cut fertilizer use) as MOP sales for a month doubled than the demand.