Farmers anticipate dark days ahead as fertiliser companies hike prices

Already dealing with black marketeering, artificial price hike of raw materials and a low income due to COVID-19 pandemic, farmers say the rise in fertiliser prices will add to their budget and burden  

The Bill was passed by the state assembly last year and has been sent for the consideration of the President by the Haryana governor | Representative photo: iStock

Farmers, already hit by losses due to the COVID-19 pandemic, may end up shelling out twice the money to buy fertilisers as a result of the hike recently effected by fertiliser manufacturing companies.

Last week, Indian manufacturers announced a hike in prices of chemical fertilisers, an event triggered by a spike in global prices of potash and phosphate. With the farming community highly dependent on fertilisers like urea and a few other mixed combinations, the price rise has increased their anticipation about getting finances for future crops.

If the new prices are considered, a farmer will have to pay at least 50 per cent extra for the same amount of fertiliser that he used to get prior to the price rise. This in turn will increase the overall production cost of the crop. Farmers say this will an extra burden on them while they are already dealing with black marketeering, illegal price hike in local markets and artificial shortages.

Related news: Fertilizer subsidy may cross ₹1 trillion in next fiscal


“The price hike in fertilisers is going to hit farmers across the country, especially the ones in the distressed regions (Marathwada) like ours. The entire budget for the Kharif season has now collapsed and been adversely affected by just one price hike,” says Vitthal Solanke, a young farmer from Jalna district of Maharashtra. He sows soyabean, cotton and tur dal (pigeon pea) on his five acres of land.

The fertiliser companies are yet to roll back the revised prices, even though the Centre has rapped them for hiking rates in the middle of a pandemic. Farmers say the government should actively intervene in the issue and ask companies not to increase rates at least for a year.

The data on the price hike shows that among four major fertilisers, a farmer will have to pay at least ₹475 extra for each 50 kg sack of an IFFCO product. The retail price of DMP fertiliser has gone up to ₹1,900 from ₹700. Similar price rise has been effected by popular fertiliser manufacturers like Koromandal, Smartchem, GSFC, RCF and Krubhaco.

An average farmer in Maharashtra spends ₹6,000 per acre on fertilisers as per the old rates. The new rates will ratchet up the budget to ₹9,000-₹10,000 per acre. While this is a general estimate, the use of fertilisers, however, may vary according to crop type, soil quality and other related factors.

While explaining the scenario in the villages, another farmer Dadasaheb says, “A sudden price hike is going to create a big mess in local markets for the farmers. Though the hike is about one and a half times the previous price, the actual cost to the farmer would be doubled. This is because the local dealer is also going to take false advantage and hike his retail prices.” He adds that the farmers have no option but to buy from local dealers on their terms.

“Along with the individual price manipulation by the local dealer, a lobby of certain dealers creates artificial shortage of fertilisers. Further, this skewed demand-supply ratio results in price hike in the local markets. Eventually, this benefits traders only,” Dadasaheb said.

Vijay Javandiya, another farmers wonders how his community is going to break even at a time when prices of cereals have dropped and that of fertilisers have increased.

“Amid the pandemic, the prices of cereals are dropping and in this backdrop, the rate of fertilisers is being hiked. Some of the companies have also sent the packages with new MRPs while the Centre says that it hasn’t approved the new rates. There is an utter confusion among people,” he said.

Explaining the subsidy structure, he said, “The prices of urea have dropped. As a result the expenditure on subsidies has also declined. But mixed fertiliser prices have increased as the government reduced their share of subsidy for these fertilisers. The companies have given the freedom to restructure prices as per global price changes in raw materials. This has resulted in this kind of unusual price.”

Related news: Why small businesses in agri sector are worried about farm laws

Javandiya also said that it would be no surprise if the prices of pesticide and other farm products increase in the coming days. He wonders whatever happened to the Modi government’s doubling the income of farmers by 2022.

Nationalist Congress Leader, Sharad Pawar has also written to the centre to roll back the prices to their original rates. Followed by that letter, the Maharashtra Congress has also warned to conduct a state-wide “Ghantanaad” (bell-ringing) agitation if price hike is not withdrawn in the next two days.