People's Democracy

IT was a rare initiative by any trade union organisation, and received with high appreciation from the varied delegates and the professionals from different fields who attended. The mark of professionalism was evident and acknowledged in each and every aspect of the workshop – the volume, variety and depth of the workshop materials, the effective combination of the resource persons, the structure and methodology, etc. This national workshop, to debate and work out an alternative fertilizer policy, was organised by the Fertilizer Workers Federation of India (March 15-16) and held in New Delhi.

Inaugurated by Sukhdev Singh Dhindsa, Minister of Chemicals and Fertilizers, several important speakers participated in the inaugural session included Chaturanan Misra, former Union Minister of Agriculture. The panel of the central trade union leaders included. M K Pandhe, general secretary, CITU, H. Mahadevan, dy. general secretary, AITUC and R A Mital, secretary, HMS. CPI(M) MP Dipankar Mukherjee gave the background and perspective of the workshop, namely towards a long-term fertilizer policy, emphasising the need for a thorough study and discussions at different levels before the policy is finalised.

The central trade union leaders appreciated the step of the FWFI and said that in the face of the serious challenge, it was essential to adopt a multi-pronged approach. While supporting the industry-wise struggles, they reiterated the need for the broadest unity of the trade union movement to launch a united movement to defend the public sector and for that matter the economic sovereignty of the country.

The workshop had the unique distinction of having representatives covering the entire spectrum of the industry. They represented all the four regions of the country; from Namrup to Trombay and Nangal to Tuticorin, both the public and private sector plants, making a total of thirteen fertilizer companies: the FCI, HFC, RCF, NFL, PDIL, FACT, MFL, PPCL, SPIC, PPL, Godavari, Chambal, Duncan.

In addition to these worker participants, there were also serving and retired chairmen and managing directors, functional directors and general managers; MPs, economists and other experts.

Presentations were made by O.N.Kapoor, ex. CMD, PDIL; Dr.Uttam Gupta, chief economist, Fertiliser Association of India (the autonomous forum of the entire fertilizer industry); Dr A K Roy, chief executive, Economic Information Technology, Kolkata; S B Sengupta, ex.agronomist, Fertilizer Promotion & Agricultural Research; L Joshi, general manager (Marketing) PPCL, and Chaturanan Mishra, former union agriculture minister. Each technical session was followed by lively discussion from the floor.

The minister praised the FWFI for organising the workshop and assured the organisers that the ministry would consider all the relevant factors while finalising the fertilizer policy, and examine the impact of the same. The recommendations of the workshop would also be taken into consideration by the government. Shri Dhindsa also said the Federation was welcome to come to his office for discussion, and for that matter was not averse to hearing the views of all concerned.

Based on the papers, presentations, discussions and speeches, a set of recommendations were drawn up in the concluding session,to be submitted to the government through the union minister of chemicals and fertilisers; to MPs of the concerned Parliamentary Standing Committee through the chairman of the committee; and the message, outcome and understanding of the workshop taken to the grass-root level through intensive campaign programmes.

Fertilizers as one of the most effective inputs for increasing agricultural produce, played a very important role in India’s phenomenal increase in food-grain production leading to the self-sufficiency achieved during the last 35 years. Thus the fertilizer sector, which is directly connected with food security and the food security of the country, cannot be classified as a non-core sector.

Examining the recommendations of the Expenditure Reforms Commission (ERC) as pronounced in the Budget this year, their adverse repercussions on the farmers, industry and long term fertilizer availability were noted as:

Farmers: As per the ERC recommendations the urea price would be increased from the present Rs 4,600.00 to Rs 6,900.00 per tonne with the provision for a seven per cent increase per annum, and ultimate complete de-regulation of price by the year 2006.

Industry: The majority of the naphtha and fuel oil-based plants, as also a number of gas-based plants would become unviable, with their inevitable eventual closure.

Availability: In the matter of availability, the country would land into total dependence on imports for a critical input like fertilizers

The fertilizer PSUs including companies like NFL, MFL, FACT, PPL, RCF, etc., presently earmarked for disinvestment, have contributed immensely to attaining self-sufficiency in fertilizer production. Disinvestment of these companies would not serve any national interest, but only facilitate closure of many of the plants and retrenchment of thousands of workers.

SICK UNITS:

The present indigenous production of urea in our country is 19.2 million MT per annum against a consumption of 21.00 million MT. The country would need an additional quantity of about 8 million MT of urea per annum, by the end of the 9^th Plan according to an (optimistic) estimate of the 9^th Plan Working Group. The stoppage of production in the sick units of HFC and FCI has added to the deficit by two million MT.

Experience has shown that when Indian imports, substantially increase, international prices shoot up heavily. In addition there is the question of uncertainty of availability of such a huge quantity from the world market, as also inadequate port facilities for handling of such a huge quantum of imported urea, and its transportation, which would pose a great challenge. Hence the workshop recommends:

1. Availability of Urea should be ensured from old vintage plants, which contribute one third of the existing production, by infusing funds into these to make/keep, these plants productive, thereby avoiding increasing dependence on imports. Revamping of the FCI, HFC, PPCL plants would be more cost-effective compared to new grass-root plants.

The demand for nitrogenous fertilizers is increasing at the rate of around five per cent each year, which is expected to continue in future as well. This would amount to an additional requirement of 10 lakh MT per annum.

Government policy should be to add one standard sized ammonia-urea complex every year to meet this additional demand.

Consumption of phosphatic fertilizers, particularly SSP has been virtually stagnant over the years resulting in gross imbalance in the NPK ratio. As a result, about 50 per cent of the existing capacity of SSP plants remain idle. Considering the sulphur deficiency in Indian soils, use of SSP carrying the agronomically important secondary nutrient sulphur, needs to be encouraged through: -

1. intensified promotional activities ;
2. availability of duty-free imported raw materials and intermediates for increasing indigenous phosphatic fertilizer production. The grant of concession for SSP prices thereby ensuring the farmers, capacity to buy the product, and making it uniform all over the country on a proportionate basis to DAP, against the current different prices in different states;
3. Minimised import of DAP so that the existing SSP capacity can be fully utilised.

LNG: No doubt natural gas is the most preferred feedstock. In the proposed Fertilizer Policy, the existing Naphtha/Fuel Oil/LSHS-based 27 number of fertilizer producing units have also been asked to switch over to this feedstock. Since the domestic availability of natural gas is not commensurate with the demand, this has to be imported either through cross-country on-shore, or off-shore pipe lines from neighbouring countries like Bangladesh, Myanmar, Iran or in the form of LNG through the sea route.

However, we have to decide whether to permanently depend on costly and imported feedstock for production of fertilizer or to switch over to comparatively cheaper and abundantly available indigenous feedstock, i.e., coal. India has huge reserves of coal sufficient to last for more than 200 years. Our experience in the past of coal-based plants should not deter us from taking a decision in favour of coal as feed-stock, since present day technological development in the field of coal-gassification is encouraging.

The promotion of fertilizer and technology to farmers for field application is very important. Educating and training the farmers in method, time and dose of fertilizer application is very essential for enhancing the use-efficiency and productivity.

In developed countries farm subsidies are on a much larger scale than in developing countries. Ironically, the subsidy per capita per hectare of arable land is the lowest in India and any attempt to reduce it further will surely endanger our food security. Fertilizer being an essential agricultural input under the modern HYV technology package adopted by all categories of farmers, its price is an important factor in motivating its ever-increasing use. A low price of fertilizer is linked to the much bigger question of protecting the millions of small and marginal farmers on the one hand, and the majority of the poor consumers of food-grains on the other.