Punjab Congress president, Partap Singh Bajwa, while strongly opposing the move of the Narendra Modi government at the centre to end freight subsidy on potash and phosphorus fertilizers, said it would adversely hit farmers in high fertilizer consumption states like Punjab and Haryana.
"The move is likely to increase the prices of these fertilizers by at least Rs 300 to Rs 400 per metric tonne, thereby adding to the cost of production. The agriculture sector is already in crisis and the farmers are distressed," he added.
Punjab and Haryana have a huge demand of diammonium phosphate (DAP), which is imported via Gujarat ports. The reduction in subsidy would thus make these fertilizers costlier in the absence of corresponding increase in the minimum support price.
He referred to the letter written by the Punjab chief minister Parkash Singh Badal to the union fertilizers minister Ananth Kumar in this regard. The March 26 letter states: "It has been brought to my notice that the department of fertilizers is going to change the freight reimbursement policy to P and K suppliers as a result of which suppliers would be reimbursed primary freight of Rs 1240 per MT instead of actual freight of reimbursements which on average are about Rs 1800 PMT".
Badal pointed out that the suppliers would have to bear additional cost of `500 per tonne for supplying the same to Punjab and Haryana which in turn would be passed on to the farmers. This might have implications for the central buffer stock.
This letter followed the February 3 meeting of the officials concerned in Delhi that the proposal to decontrol the movement of fertilizers was being considered "in order to give freedom to the industry to do business without any government intervention and without affecting the present price levels of fertilizers".
At the same time, the note of this meeting conceded that the "removal of any freight along with decontrol of movement plan will widen the prices of these fertilizers, particularly in the northern region located away from the ports".
He said the anti-farmer face of the Modi government had already become clear with the amendment to the land acquisition legislation which has been supported by the Shiromani Akali Dal. This action in reducing freight subsidy would further fuel anger among the farmers, particularly in Punjab and Haryana.
He urged the Modi government to withdraw this proposal immediately.