India tightens fertilizer controls to shield farmers from price shocks
The Indian government regulates fertilizers as essential commodities to ensure steady supply and fair pricing for farmers. Subsidies and strict monitoring systems help stabilise costs, while illegal practices like forced product bundling face criminal penalties. Recent global price swings have pushed authorities to strengthen import strategies and domestic production. Fertilizers in India fall under the Essential Commodities (EC) Act, 1955, and the Fertilizer Control Order, 1985. This classification allows state governments to take legal action against malpractices, including the illegal 'tagging' or 'bundling' of non-essential items with fertilizers at retail points.
The Nutrient Based Subsidy (NBS) scheme, introduced in 2010, sets support levels based on nutrient content rather than product price. This approach aims to keep costs predictable for farmers. Under a separate Urea Subsidy Scheme, urea is sold at a fixed Maximum Retail Price (MRP) of ₹242 per 45 kg bag. To prevent shortages, the Department of Agriculture and Farmers Welfare forecasts state-wise fertilizer needs before each cropping season. Gaps in domestic output are filled through advance imports. For the Rabi 2025-26 season, an extra ₹3,500 per metric tonne has been allocated to cover logistics and global price fluctuations. The government also coordinates with the Ministry of Railways to secure enough freight rakes during peak demand. Global fertilizer prices have seen sharp changes over the past decade. After spiking in 2008-09, phosphate fertilizer prices (DAP, MOP) dropped until 2015 due to oversupply. They surged again in 2021-22 because of the Ukraine conflict and energy crises, with DAP rising from around 350 USD/tonne in 2010 to nearly 900 USD/tonne in 2022. In response, India diversified import sources, signing long-term contracts with suppliers like Russia and Morocco. Domestic production also increased, cutting reliance on foreign urea imports by 20-30% by 2025. The Integrated Fertilizer Management System (iFMS) tracks subsidised fertilizers in real time from production to sale. This digital oversight helps curb black marketing and ensures timely deliveries to farmers.
The government's measures aim to shield farmers from price volatility and supply disruptions. Subsidies, import diversification, and real-time tracking systems work together to maintain affordability and availability. Legal safeguards further deter malpractices, ensuring fertilizers reach those who need them most.
