Shri S.S. Dhindsa,
Union Minister for Chemicals and Fertilizers has said that the
biggest challenge facing the Fertilizer industry is to cope with
the situation arising outside the protected environment of the
retention price scheme. He said that the industry will have to
improve their bottom line by implementing energy saving and other
cost cutting measures, to be able to survive in the ensuing policy
regime.
Inaugurating
a Seminar on the theme "Fertilizer and Agriculture – Meeting
the challenges"organised by Fertilizer Association of India
here today, Shri Dhindsa said that the Retention Pricing Scheme
(RPS), unit wise cost plus scheme, has been successful in achieving
the objectives of increasing production and consumption of fertilizers,
ensuring availability at an affordable price and giving a reasonable
rate of return to the producers. He said that RPS was discontinued
for all fertilizers except urea in 1992, which have resulted in
several aberrations and increasing burden of subsidy necessitating
a re-look at this scheme for urea also.
Shri Dhindsa
said that a more immediate challenge the industry faces was that
of being exposed to international competition. Due to inherent
inefficiencies and cost disadvantage, non-gas based nitrogenous
units, producing over 30 per cent of the domestic output, would
find it difficult to compete in face of cheaper imports. The Phosphatic
fertilizer producers would also face similar threats as the cost
of raw materials is as high as the cost of imported fertilizers.
He said that eventual goal should be to evolve a uniform pricing
system wherein the units compete with each other by way of reducing
costs and improving operational efficiencies.
Referring to
the paradoxical world market where India exercise a strong influence
but is unable to benefit in terms of price Shri Dhindsa underlined
the need for negotiating efficient import contracts to cut costs.
He urged the domestic industry to increasingly look at either
setting up joint ventures abroad for manufacture of intermediates
used for fertilizer manufacture or device mechanism to efficiently
import raw material from other countries. The recent discoveries
of large quantities of gas reserves on the East Coast will increase
the opportunities for the industry to cut costs as well, he added.
Pointing out
the indiscriminate use of a single nutrient and the unbalance
use of fertilizers impairing soil health and crop output Shri
Dhindsa emphasized the need for taking the message of "Integrated
Plant Nutrient Supply System" (IPNS), involving judicious
use of bio-fertilizers, organic manures and fertilizers to the
doorstep of every farmer. He said the farmers also need to be
educated about the problem like presence of excess salts, rising
water table, leaching, etc.
The Minister
said that both the Government and the industry also need to focus
on research and development efforts for aiding survival in the
eventual decontrolled regime. Unconventional resources such as
coal bed methane, natural gas hydrates and underground coal gasification
for nitrogen fertilizers, low quality rock phosphates for phosphates
fertilizers and alternate potash sources such as glauconite sands,
salts water bittern, sea weeds etc. need to be researched upon,
he added.
