ONE NATION ONE FERTILIZER SCHEME

1. Context

2. One Nation, One Fertilizer Scheme

3. Government's argument for introducing this scheme

• There are some 26 fertilizers (Inclusive of urea), on which government bears subsidies and also effectively decides the MRPs.
• Apart from subsidizing and deciding at what price companies can sell, the government also decides where they can sell. This is done through the Fertilizers (Movement) Control Order, of 1973.
• When the government is spending vast sums of money on fertilizer subsidies (the bill is likely to cost Rs 200,000crore in 2022-23), plus deciding where and at what price companies can sell, it would obviously want to take credit and send that message to farmers.

4. PM Kisan Samruddhi Kendras (PM-KSK)

• PM Kisan Samruddhi Kendras (PM-KSK) will act as a one-stop-shop for farmers who can buy products and avail of multiple services related to the agriculture sector. The PM-KSK will supply agri-inputs like seeds, fertilizers, and farm implements.
• It will also provide testing facilities for soil, seeds, and fertilizers. Information about government schemes will also be provided.

5. How will this scheme help Farmers?

• The rationale behind bringing the One Nation One Fertiliser scheme is that since fertilizers of a particular category must meet the nutrient-content specifications of the Fertilizer Control Order (FCO), there is no product differentiating among different brands for each type of fertilizer. For example, DAP should have the same nutrient content, whether it is produced by one company or another. So the concept of 'One Nation, One Fertilizer' will help farmers overcome their confusion over brand-specific choices, as all DAP fertilizers brands must have 18% nitrogen and 46% phosphorous.
• Farmers are generally unaware of this fact and prefer certain brands as a result of vigorous marketing strategies adopted by firms with strong retailer networks developed over time. It has been found that such brand preferences have resulted in fertilizer-supply delays to farmers and an extra burden on the exchequer due to increased freight subsidies needing to be paid for the long-distance crisscross movement of fertilizers.
• The One Nation One Fertilizer scheme will prevent the criss-cross movement of fertilizers and reduce high freight subsidies.

6. Drawbacks of the scheme

1. It will disincentivize fertilizer companies from undertaking marketing and brand promotion activities. They will now be reduced to contract manufacturers and importers for the government. Any company's strength ultimately is its brands and farmers' trust built over decades.
2. In the case of any bag or batch of fertilizers not meeting the required standards, the blame is put on the company. But now, that may be passed on fully to the government.

For Prelims & Mains