Tamil Nadu Chief Minister J.Jayalalithaa has shot off yet another letter to the Prime Minister. In her latest communication, the AIADMK Chief has flagged concerns of farmers in the State over the "introduction of the Nutrient Based Subsidy Scheme (NBS) by the Government of India from the 1st April, 2010, coupled with an unreliable supply of fertilizers" that she feels is "threatening to deprive our farmers of their basic means of sustenance and livelihood."
The annual consumption of Chemical Fertilizers in Tamil Nadu is about 28 Lakh Metric Tonnes (MT).
"With the introduction of the NBS policy, liberty has been given to the Manufacturers/Importers of Chemical Fertilizers to fix the MRP based on their cost of production/ import. Since then, these fertilizer companies have been hiking the retail price of fertilizers at will, causing extreme hardship to farmers."
Jayalalithaa adds that "consequently, the prices of various fertilizers have gone up two to three times after the introduction of the NBS policy. The increase has been particularly steep since April, 2012. To cite a few examples, between 17th April, 2012, and 18th June, 2012, the MRP of a 50 kg bag of DAP and MOP marketed by Indian Potash Limited has increased from Rs.910/- to Rs.1200/-, and Rs.680/- to Rs.840/- respectively. The rate of a 50 kg bag of DAP (IPL) has gone up to Rs.1200/- from Rs.486.20 (an increase of 247%), a 50 kg bag of MOP (IPL) now costs Rs.840/- as against Rs.231.66 (an increase of 363%), the rate of a 50 kg bag of Complex 10:26:26 (IFFCO) has increased to Rs.1110/- from Rs.374.24 (an increase of 297%) and the rate of a 50 kg bag of Complex 20:20:0:13 (Greenstar) has increased to Rs.858.76 from Rs.327.40 (an increase of 262%) since 2010."
What's worse, "the Department of Fertilizers, has reduced the subsidy for 2012-2013 for DAP to Rs.14,350/- per MT from Rs.19,763/- per MT fixed last year, and for MOP to Rs.14,400/- per MT as against Rs.16,054/- per MT fixed last year. I understand that the Department of Fertilizer has also proposed a hike of another 10 per cent in Urea prices and has also planned to cut subsidies further on the pretext of subsidizing bio-fertilizers. Faced with a steep price rise and having to digest a sharp reduction in subsidy, our farmers have been hit hard in terms of economic returns from farming."
Tamil Nadu has tried to "mitigate the blow" by waiving the levy of 4% VAT on the sale of fertilizers, from the 12th of July, last year.
Making out a case for the scrapping of the NBS policy and calling for the reintroduction of the fixed Maximum Retail Price for all fertilizers, Jayalalithaa has cautioned the Centre that "a situation will emerge wherein farming will become absolutely unremunerative, resulting in large tracts of land being left uncultivated."
Tamil Nadu is expected to record an all-time high level of food-grains production of 103.85 lakh MT during 2011-2012. But the "supply of fertilizers continues to be dismal in the current financial year".
Incidentally, the Union Minister for Fertilizers and Chemicals is DMK Chief Karunanidhi's elder son M.K.Alagiri.