One Nation, One Fertiliser: Modi's “Bharat” brand subsidised urea is a game changer

After the unfortunate debacle of the government’s Agri Bills, farmers’ issues in India, once again, seem to be pushed to the backburner. The sad fact is that most middleclass people are not very interested in our farmers, nor do the latter’s issues feature on the mainstream national media. Unless, of course, there is an agitation or some political paroxysm.

No wonder, then, that the government’s new scheme of “One Nation, One Fertiliser” attracted little comment or attention. But the fact remains that despite the failure of the farm bills the government is committed to reforming the sector which is crucial to India’s prosperity and progress.

On Monday, October 17th, Prime Minister Narendra Modi, inaugurating 600 farm prosperity centres (Kisan Samruddhi Kendras), rolled out the single brand subsidised fertilizer plan. “Bharat,” which is its name, will make standardised and high quality fertilizer available across the country to the farmers are fixed prices.

A new weekly, “India Edge,” was also launched in the function hosted jointly by the agriculture and fertilizer ministries, with their respective ministers, Narendra Singh Tomar and Mansukh Mandaviya, present.

Ending the confusion

Under the new scheme, One Nation One Fertilizer (ONOF) also called Pradhan Mantri Bhartiya Jan Urvarak Pariyojana (Prime Minister Peoples’ Fertilizer Project), it will be obligatory for all manufacturers of subsidised urea and di-ammonium phosphate (DAP) fertilizers to market and sell their products under one brand.

This will end the confusion in the minds of the farmers as to which brand to buy, especially when middlemen, seeking higher commissions, push certain products over others.

The newly opened PM-Kisan Samruddhi Kendras (PM-KSK) will also provide a one-stop shop to answer farmers needs for seeds, implements, fertilisers, information on government schemes, in addition to testing soils, seeds, and fertilizers. Unlike the stores of fertilizer companies or private operators, the PM-KSKs will have farmers’—and the nation’s interests—in mind, not merely profits. Eventually, the over 325,000 fertilizer retail outlets in the country will be converted to PM-KSKs.

Once primarily an agri-based economy, India continues, in comparison to other large economies, to be a farmers’ nation. As per a written reply in the Parliament in Feb 2020, Agriculture and Farmers Welfare Minister, Narendra Singh Tomar, confirmed that there are over 230 million farm workers in India.

Of these 127.3 million are cultivators and 106.8 labourers. Though the numbers and percentages of those engaged in this sector are declining, the sheer weight of agriculture on nation remains enormous. As of the last Census of 2011, over 50% of India is still involved in agriculture in one way or another.

India’s food grain production has also increased to some 314.51 million tonnes in 2020-2021, making India an agricultural powerhouse and net exporter.

Last year India produced a record 129.66 million tonnes of rice, 13.23 million tonnes higher than the last five years’ average. Similarly, 106.41 million tonnes of wheat were produced in India in 2020-2021, 2.53 million tonnes higher than the previous five years’ average.

Nevertheless, the subsidy burden on this sector is also huge and debilitating.  On fertilizer alone, a single bag of which costs Rs 75-80 and is sold to farmers at Rs 5-6, over Rs 2.5 lakh crores or Rs 2500 billion is spent by the exchequer.

If we add to it the costs of buying grains from farmers at the minimum support price, storing and transporting the grain, and the wastage losses, an estimated 30% of India’s GDP of about $3 trillion is spent, in one way or another, to support the agricultural sector.

When it comes to fertilizer, urea, after petroleum, remains one of India’s big ticket imports, draining foreign exchange reserves. Union Fertiliser Minister, Mansukh Mandaviya, has promised to reduced import-dependence by 2024-25 by locally produced “nano urea.”

That would save the exchequer Rs 40,000 crore each year. Last year, India imported over Rs. 50,000 crores ($6.52 billion) of urea, mostly from China, Oman, UAE, and so on. But to reduce dependence on Chinese imports, India has started importing the natural fertilizer from the US for the first time this year.

While the One Nation One Fertilizer (ONOF) does little to reduce this import dependence nor to mitigate the huge subsidy on fertilizers, it does streamline the distribution and availability of the precious resource. By cutting out middlemen and devious competition between manufacturers, it also protects farmers’ interests.

Such pro-farmers measures will help boost the peoples’ confidence in the government, also translating to electoral dividends. Though the Modi government has been attacked for its ideology and politics, not enough attention or credit has been given to it for its continuous efforts at delivering good governance.