:: Paranjoy Guha Thakurta

Overhaul fertiliser subsidy or prepare for a food crisis

Paranjoy Guha Thakurta

Augest.09: The sooner the government drastically overhauls the existing fertiliser subsidy structure, the better. Vested interests, including privately-owned and public sector fertiliser manufacturing companies, want the present complicated and convoluted system of fertiliser subsidy to continue. But the longer this happens, the greater the harm that will be inflicted on the country’s agriculture and food security.

Here’s what Union finance minister Pranab Mukherjee said in his Budget speech on July 6: "In the context of the nation’s food security, the declining response of agricultural productivity to increased fertiliser usage in the country is a matter of concern. To ensure balanced application of fertilisers, the government intends to move towards a nutrient-based subsidy regime instead of the current product pricing regime. It will lead to availability of innovative fertiliser products in the market at reasonable prices. This unshackling of the fertiliser manufacturing sector is expected to attract fresh investments in this sector. In due course it is also intended to move to a system of direct transfer of subsidy to the farmers".

A recent report published by Greenpeace India, authored by three scientists — B.C. Roy, G.N. Chattopadhyay (both of the Institute of Agriculture, Visva Bharati University at Sriniketan, Birbhum in West Bengal) and Reyes Tirado (University of Exeter, United Kingdom) — succinctly summarises the problem in its title and subtitle: Subsidising Food Crisis: Synthetic fertilisers lead to poor soil and less food.

Whereas intensive agriculture characterised by high use of synthetic fertilisers and chemical pesticides, that became widespread in certain parts of India in the late-1960s, contributed greatly to a rise in food production over the better part of roughly five decades, there is today sufficient scientific evidence to indicate that indiscriminate use of such fertilisers and pesticides has led to a sharp deterioration in soil quality. Consequently, even with progressively higher fertiliser use, food output is no longer increasing — or an instance of diminishing returns.

The use of fertilisers varies widely from region to region. In 78 out of the 528 major districts in the country, the total use of synthetic fertilisers is more than 200 kg per hectare, which is twice the national average. Six crops — rice, wheat, cotton, sugarcane, rapeseed and mustard — consume roughly two-thirds of the total quantum of synthetic fertilisers used and the irrigated area in the country (accounting for around 40 per cent of the total cropped area) receives 60 per cent of the fertilisers applied.

Studies conducted between 1960 and 2003 in Punjab, the state with the highest use of fertilisers, show that despite higher use of synthetic fertilisers, grain yield has not just virtually stagnated in recent years but actually declined between 1992 and 2003. The fall in both the quality and quantity of organic matter in Punjab’s soil, that has been well documented, is the major culprit. All over India, the average crop response to fertiliser use was around 25 kg of grain per kg of fertiliser used during the 1960s. This figure came down drastically to only eight kg of grain per kg of fertiliser in the late-1990s, various studies have shown.

Over the last three decades in particular, the overall outgo of government subsidy has grown phenomenally from a relatively small Rs 60 crores in 1976-77 to over Rs 40,000 crores in 2007-08 — and wait! — further to an absolutely astronomical sum that was almost three times higher at nearly Rs 120,000 crores in the last financial year that ended on March 31.

The most worrisome aspect of the subsidy regime is the skew in favour of nitrogenous fertilisers that has promoted its gross overuse. One does not have to be a farmer, leave alone an agricultural scientist, to know that a proper mix of three kinds of fertilisers — that is, NPK (or nitrogen, phosphorus and potassium) — should be used to ensure that crop output grows in a sustainable manner. The current subsidy structure is excessively tilted in favour of nitrogenous fertilisers, in particular urea that accounts for over 80 per cent of the total consumption of such fertilisers in the country.

Interviews with 700 farmers located in seven states, that were conducted by the scientists in the Greenpeace study, indicated that over 80 per cent of the "surveyed farmers reported that they used higher doses of nitrogen to replace other nutrients" since synthetic nitrogenous fertilisers were cheaper.

Several long-term fertiliser trial experiments conducted under the aegis of the government’s Indian Council for Agricultural Research have confirmed this deleterious trend of lower soil fertility that constrains sustainable agriculture. What is more, the scientists point out that such a trend has caused long-term ecological damage by lowering ground-water tables, besides resulting in higher emissions of greenhouse gases that, among other things, create dead zones in oceans.

Besides benefiting manufacturers more than farmers, the present subsidy regime is tilted disproportionately in favour of relatively richer agriculturists in irrigated regions and against poorer farmers who cultivate mainly rain-fed areas that account for around 60 per cent of the total cropped area in India. The scientists are clear that the government must create an alternative system that promotes ecologically-friendly farming using organic soil amendments (such as vermicompost) and that it is feasible and possible to completely "shift from synthetic to organic nitrogen fertilisation".

The scientists believe that in five years it may even be possible for the government to save as much as Rs 1,200,000 crores — or 10 times the amount given as subsidy last year — by giving up the current "irrational" and "unsustainable" policy of subsidising synthetic fertilisers and instead adopting ecological practices by re-focussing scientific research on farming practices that would ensure future food security even as the planet’s climate changes inexorably.

A drastic overhaul of the fertiliser subsidy structure is as important as enacting a National Food Security Act and improving the public distribution system for foodgrains. Will the government act soon? Will it hurt the interests of inefficient industrial ventures since there is no other way forward? Or will the powers-that-are substitute their inability to commit itself by forming yet another committee? The government’s inaction is mortgaging the future of your children.

Paranjoy Guha Thakurta is an educator and commentator