Draft integrated Plant Nutrition Management bill 2022

The Department of Fertilizers has sought comments from all stakeholders on the draft Integrated Plant Nutrition Management Bill, 2022.

To promote the development and sustainable use of balanced fertilizers, including bio-fertilisers, bio-stimulates, nano-fertilizers and organic fertilizers.
To simplify the process for the manufacture, production, distribution and price management of fertilizers in India, which will, in turn, improve the ease of doing business.

Integrated Plant Nutrition Management Authorityto be established and tasked with regulating the registration of fertilizer manufacturers, set out technical standards with respect to the quality of fertilizers etc.
The Central Government may fix the maximum prices of fertilizersto regulate the equitable distribution of fertilizers and their availability at fair prices.
No person can manufacture, sell, import for sale, or market fertilizers without obtaining the appropriate registration.
States have been empowered to appointState Controllers of Fertilizers and Fertilizer Inspectors, who can conduct impromptu inspections on industry and trade armed with overarching powers to search, seize and confiscate.
The Central Government may prescribe the manner in which fertilizers may be moved from one state to another.

The fertiliser industry is of the view that the draft Integrated Plant Nutrition Management Bill, 2022, floated a few weeks ago, could meet the same fate as the repealed farm Acts if the government hurries with the legislation without proper debate by all stakeholders, including farmers and state governments.

Bill too focused on tightening the already pervasive government controls over the fertiliser sector, by setting up an elaborate Inspector Raj to oversee it.
The Bill empowers the Centre with sweeping powers to cap the maximum selling prices for fertilisers, while allowing it to fix different prices for different regions and customers.
The Centre will have powers to restrict the movement of fertilisers from one State to another and to dictate the quantities of fertiliser a manufacturer may sell in each State
The sectoral regulator in the form of an Integrated Plant Nutrition Management Authority of India, State Controllers of Fertilisers and Fertiliser Inspectors, given overarching powers to search, seize and confiscate.
The fertilizer industry rightly apprehends that the elaborate inspector Raj will encourage rent-seeking and hamper ease of doing business.

The Indian fertilizer industry is near self-reliant in the case of Nitrogen-based fertilizers.
India is the 2nd largest consumer of Urea fertilizers after China.
India also ranks 2nd in the production of nitrogenous fertilizers and 3rd in phosphatic fertilizers.
Productions are largely state-controlled. Popular PSUs are The Fertilizer Corporation of India Ltd, National fertilizers Limited, Hindustan Fertilizer Corporation Ltd., etc.
India meets 85 percent of its urea requirement through indigenous production but depends heavily on imports for its phosphate and potash (P & K) fertilizer requirements.

New Pricing Scheme(NPS) of 2002: The subsidy given to industry equivalent to a differential amount of cost of production and selling price to farmers.
Nutrient Based Subsidy(NBS) policy, 2010: Subsidy fixed on the weight of different macro/micronutrients
Neem Coated Urea Policy, 2015: It mandates fertilizer manufacturers for neem coating, to address the issue of black marketing and overuse.
Gas Pooling Policy, 2015: All units will get uniform prices of gas.
New Urea Policy, 2015: Free transportation of Phosphorus and Potassium fertilizer according to industrial demand.

For long, India’s fertiliser industry has been hamstrung by government controls that allow the Centre to fix selling prices of fertilisers, including ‘decontrolled’ ones, far below actual production costs, leading to manufacturers and importers hugely depending on the Centre’s subsidy.
Artificially low price caps on urea and higher prices for phosphatic fertilisers have actively encouraged skewed nutrient use.
The solution to most of the sector’s woes lie not in extreme controls but in the Centre stepping back completely from interventions in the product and pricing decisions of the industry and directly compensating farmers for nutrient use through cash transfers.

This post was last modified on March 2, 2022 5:59 pm

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