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Home Government and Policy What the Government is doing to avoid illegal diversion of fertilizers

What the Government is doing to avoid illegal diversion of fertilizers

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Ashutosh Muglikar
Articles on Corporate Laws, Policy, Economics and Politics. Maverick. Lover of Ideas. Slayer of Hoaxes.

Last week OpIndia broke an exclusive story of how Ashok Gehlot’s brother was allegedly involved in a supply chain which was diverting Muriate of Potash to non farm use by exporting it to foreign countries. This alleged scam exposed the glaring loopholes that allow unscrupulous elements to hoodwink the system and cheat the farmers of what must be rightfully theirs.

PM Narendra Modi has promised to double the farmers income by 2022 and there are a lot of hurdles which need to be addressed for this goal to be achieved. This brings us to a major issue that is affecting welfare of farmers since decades. When a farm consumable is diverted to illegal use, dual effect can be seen on the economy.

1. That the subsidy cost is still borne by the Government due to illegal sales.

2. There will be an artificial scarcity of the products in the market thereby raising their prices which in turn affects farm output.

One of the poll pitches and subsequent claim of achievement by the Modi government has been the approval of Comprehensive New Urea Policy [pdf]. Farmers use Urea, Complexes, Diammonium Potash (DAP) and Muriate of Potash (MOP) and this policy addresses each of these nutrients and their production. This policy claims a direct saving of subsidy of around Rs. 2618 crore and indirect saving of Rs. 2211 crore for the Government.

Illegal diversion of urea and other important fertilizers is a severe problem. One simple method undertaken to address this problem was neem coating of Urea. The Government amended the Policy to allow Urea producers to produce neem coated urea upto 100 percent of production and made it mandatory to produce a minimum of 75 percent of domestic urea as neem coated, so that farmers are benefitted.

Neem coated urea is required less in quantity and still ensures higher crop yields. The most important aspect is that Neem coated urea becomes unfit for industrial use, so chances of its illegal diversion to industries are negligible. This simple policy change made sure that Urea becomes more effective and illegal activities are automatically addressed.

The government also restarted Urea producing industries which had shut down thereby increasing the supply of these farm essentials. Providing conducive environment for farmers is a key milestone in achieving the target of doubling their farm incomes.

To address diversion of MOP, the government could make Aadhaar based sales compulsory from the authorized retailers. The way it’s done at ration stores. This shall leave a trail which can be traced in case there appears a mismatch between purchases and outtake.

Apart from this government must ensure speedy investigation, patrolling and tracking of illegal activities involving diversion. This shall ensure a deterrent effect for future offenders.

There is no greater crime than cheating the farmers of this country, directly or indirectly and this government must ensure swift action against those who do. Lal Bahadur Shastri left us with the ‘Jai Jawan Jai Kisan’ slogan. And while this government has done a substantial job to protect and encourage our farmers, the path to be trodden is long and winding.

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Ashutosh Muglikar
Articles on Corporate Laws, Policy, Economics and Politics. Maverick. Lover of Ideas. Slayer of Hoaxes.

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