All subsidised fertilisers including urea and DAP will be sold under the single brand 'Bharat' from October, a move aimed at ensuring timely availability of soil nutrients to farmers and reducing the freight subsidy.
Announcing the new initiative 'One Nation One Fertiliser' under the fertiliser subsidy scheme 'Pradhanmantri Bhartiya Janurvarak Pariyojna (PMBJP)', Chemicals and Fertilisers Minister Mansukh Mandaviya said the companies are allowed to display their name, brand, logo and other relevant product information only on one-third space of their bags.
On the remaining two-thirds space, he said the Bharat brand and PMBJP logo will have to be shown. The companies have been given time till year-end to clear their old stock.
In the last financial year, the central government incurred a fertiliser subsidy bill of Rs 1.62 lakh crore. In view of a sharp rise in global prices in the last 5-6 months, the government's subsidy bill is estimated to rise to Rs 2.25 lakh crore in the current fiscal.
Explaining the logic for introducing this scheme, Mandaviya said the government subsidises 80 per cent of the retail price of urea, 65 per cent of Di-ammonium Phosphate (DAP), 55 per cent of NPKs and 31 per cent of Muriate of Potash (MoP) prices. Freight subsidy is also provided in the range of Rs 6,000-9,000 crore annually.
Although the specifications of fertilisers manufactured by different companies are the same as per the Fertiliser Control Order 1985 across the nation, the products are manufactured and marketed under different brands in different states, he told reporters.
The minister said there is a criss-cross movement of fertilisers across states, causing delays in the transportation of soil nutrients and putting a freight subsidy burden on the government.
For instance, cooperatives IFFCO and KRIBCO have their manufacturing units in Uttar Pradesh but they transport and sell their products in Rajasthan and Madhya Pradesh. Chambal Fertilisers and Chemicals Ltd (CFCL) has a manufacturing unit in Rajasthan but sells its products in Madhya Pradesh.
National Fertiliser Ltd has a unit in MP but sells in Uttar Pradesh, he said.In some cases, fertilisers are manufactured in western India for marketing in the Eastern region of the country.
"The whole idea behind introducing a single brand is to stop this criss-cross movement, ensure companies sell their products in close vicinity of their manufacturing units and avoid unnecessary transportation," he said.
Prior to 2019, fertilisers were moved via railway rakes as far as 900-1000 km, which was later reduced to 850-900 km in 2019-20 and up to 700-750 km level in 2020-21, he said.
The government's aim is to bring down further the distance coverage of rail movement of fertiliser to 500 km by preventing criss-cross movement, he added.
According to the ministry, the initiative will increase and ensure the availability of fertilisers, streamline the supply process without bottlenecks, bring uniformity in fertiliser supply, control unhealthy competition among companies, and reduce the freight subsidy burden.
This will also strengthen the real-time monitoring of movement, availability, and sales of fertilizer in a state.
The minister also said there is no compromise in the quality of fertilisers under a single brand 'Bharat' and it will not create any confusion in the minds of farmers to choose the brand.
Currently, dealers play a key role in selling brand-based fertilisers to farmers to get additional benefits from the companies. Under the 'One nation, one fertiliser' initiative, farmers cannot be influenced by them, he added.
The government is making available fertilisers, namely urea and 25 grades of P&K fertilisers to farmers at subsidised prices through fertiliser manufacturers/importers.
In the case of urea, the Centre fixes the maximum retail prices and reimburses the difference between the maximum retail price and production cost in the form of subsidy.
Under the Nutrient Based Subsidy (NBS) scheme, which is being implemented since April 2010, a fixed rate of subsidy (in Rs per kg basis) is announced for nutrients namely Nitrogen (N), Phosphate (P), Potash (K) and Sulphur (S) by the government on an annual basis.
The subsidy rates per kg for the nutrients N, P, K, and S are converted into per tonne subsidies on the various P&K fertilisers covered under the NBS.