Government modifies fertiliser pricing scheme
25 Jun 2009
The cabinet committee on economic affairs (CCEA) today approved modifications to changes in fertiliser pricing due to increase or decrease in prices of various fertilisers and fertiliser inputs, effective 1 April.
The CCEA also approved modification in the procedure of payment of subsidies (concessions) to ensure financial compliance and grouping of producers based on usage of fertiliser inputs to encourage inter-efficiency amongst indigenous producers.
The government has made it mandatory for fertiliser companies to fix the `maximum retail prices' at which phosphatic and potassic (P&K) fertilisers, to make fertilisers available to farmers at affordable prices and to protect them from price volatility in the international market.
Under the revised guidelines, monthly rates of concession of di-ammonium phosphate (DAP), mono-ammonium phosphate (MAP), triple super phosphate (TSP) and muriate of potash (MOP) have been delinked from the average international price of the preceding month and the actual weighted average C&F landed price for the current month.
In case of raw materials/inputs for complex fertilisers, the one month lag, as at present, will continue, a government release said, adding, "This will rationalise the correlation of purchase prices of fertilisers and fertiliser inputs by Indian buyers in the international market."
Payment of subsidies for supplies of P&K fertilisers is now (from 1 December 2008) based on arrival/receipt of fertilisers in the district of a state against the earlier practice of release of payment on the basis of sales.
