Lessons from urea storm

The unprecedented urea storm that swept across Madhya Pradesh for nearly a fortnight seems to have subsided. Reports of farmers? aggressive demonstrations, roadblocks or looting of trucks laden with urea have, mercifully, stopped appearing in newspapers.

The unprecedented urea storm that swept across Madhya Pradesh for nearly a fortnight seems to have subsided. Reports of farmers’ aggressive demonstrations, roadblocks or looting of trucks laden with urea have, mercifully, stopped appearing in newspapers.

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Although urea supply is still not fully restored, a semblance of normalcy is discernible. Against this positive development, Chief Minister Shivraj Singh Chouhan’s assertion last Wednesday that urea crisis is over seems credible. However, politics on urea is far from over.

Curiously, neither Congress nor the BJP appear to have any definite clue as to why shortage of urea occurred. Yet, both the parties are blaming each other. That is not surprising though.   

Without getting drawn into political recriminations, let’s attempt to put the crisis in perspective. The crisis had begun to loom since 2002 when the then NDA Government closed down seven units that together produced 20 lakh MT urea.

The reason cited for the closure was that production cost of these units situated at Sindri, Barauni, Gorakhpur, Durgapur, Haldia, Talchar and Ramagundam would be much higher  compared to import. At that time imported urea was costing 80 dollars per MT.

Four years down the line, the cost of imported urea has gone up to 260 to 280 dollars per MT. While the government had imported 20 lakh MT of urea in 2005-2006, it is likely to import 50 lakh MT in the current year. This over dependence on import, at least partly, explains the prevailing problem. Another major factor that has precipitated the crisis was delay in framing fertiliser policy.

The Centre frames separate policies for Rabi and Kharif seasons. Policy for the Rabi season should have been in place by July but it came about in September this year. This, in turn, caused delay in import of urea at various ports.
Meanwhile, the government ordered wheat import. This bungled up priorities in dispatching imported urea consignments to states. Wheat overtook urea in government’s priority for supply. Demand and supply ratio for urea grew more skewed with each passing week

“Against the demand of 2.56 lakh MT in October, Madhya Pradesh got only 1.51 lakh MT. In November the State got only 2.03 lakh MT against the demand of 2.72 lakh MT and in December nearly 2 lakh MT against the demand of 2.50 lakh MT. Thus, the total deficit in supply against the demand has been nearly 2.21 lakh MT,” says Agriculture secretary Pravesh Sharma.

Admittedly, till mid-December, none had anticipated such an acute urea shortage. The Agriculture Department was confident of timely supply, having already informed the Centre about its requirement. 

“The demand for the Rabi season had been sent to the Centre on August 28,” says Agriculture Minister Chandrabhan Singh Choudhary.

However, sources in the Agriculture Department admit that they had not reckoned that good monsoon would result in expansion in area of wheat cultivation and consequent rise in urea demand to this extent. 

The sources also said if the department had an inkling of a surge in demand, it would have asked the government to put in place countervailing measures including check on hoarding, urgent negotiation with indigenous companies besides an early storage and distribution of urea through MarkFed and other agencies.

The government was jolted out of slumber overnight, as it were. As farmers’ anger over shortage spilled  onto the streets across the State in mid-December, the government woke up to the crisis.

By this time, however, the shortage had snowballed into a law and order problem. Disturbing reports about demonstrations and looting of urea started pouring from several places.

The administration sounded alert. Police vigilance over urea distribution became markedly visible at places.  The Opposition smelt an opportunity to arraign the ruling party.  The BJP retaliated with blaming the Centre for shortage. As allegations and counter allegations few thick and fast, the Chief Minister wisely eschewed politicking.

Instead, he pushed administrative steps to tide over the crisis. First Agriculture Secretary and then the Chief Secretary rushed to Delhi to sort out the shortage with Centre’s authorities.

The Chief Minister wrote letters to Ram Vilas Paswan, Laluprasad Yadav, and, finally, to Prime Minister Dr Manmohan Singh. The initiatives borne fruits. The Central ministers reciprocated Chouhan’s non-partisan approach to the crisis in similar spirit.   

Finally, by the end of year, the State had received adequate amount of urea to feel that crisis had almost diffused. The crisis has been a good lesson for the government to learn from. For, in the coming years, demand for urea is likely to increase not decrease.

Ironically, Madhya Pradesh is among the poorest states as far as fertiliser consumption is concerned.  The State’s average fertiliser consumption was 46.33 Kg/ha. during 1999-2000 as against all India consumption of 97 Kg./ha. In 2002-03 it came down to 39.20kg./ha. In 2003-2004 the consumption was 49 Kg./ha, which rose to

57 Kg./ha in 2004-05. In 2005-06 tentative consumption is 49 Kg./ha. Agriculture secretary Sharma says much as one might praise use of bio or organic fertilisers, use of chemical fertilisers would only grow in the next 20-25 years. The soil in the State is deficient in nitrogen and phosphate nutrients.

Soil of about 36 districts out of 48 has shown nitrogen deficiency while 31 has shown phosphate deficiency and 23 districts have shown potash deficiency.

As far as micronutrients are concerned, 33 districts have been found deficient in zinc and 19 districts are deficient in sulphur. Thus there is wide scope for the use of nutrients and micronutrients in the State. 

Fertiliser has been the single most important factor in the State’s march towards self-sufficiency in food production.

In the last 40 years the consumption of fertiliser in the State has gone from 1.6 lakh tonne in 1956 -57 to 7.46 lakh tonne in 1989-90 and 9.44 lakh tonne in the 1999-2000.

However, consumption declined to 7.05 lakh tonne during 2002-03 due to drought but went up in 2003-04 upto 9.83 lakh tonne and in 2004-05 10.66 lakh tonne.

For this Rabi season, the Agriculture Department had estimated demand of 17 lakh tonne fertilisers including eight lakh tonne urea. This was probably the highest ever estimate of fertiliser demand in the State.