LAWS & POLICIES FOR FERTILIZER

SECTOR
 LAWS FOR FERTILIZER
INDUSTRY

Fertilizer Control Order -1985

(This order Conferred by Section 3 of the
Essential Commodities Act , 1955)
Basic things come under FCO :
1. Compulsory Registration of Fertilizer makers , importer and sellers
2. Specification of all Fertilizers produced, imported ,exported or sold in India .
3. A set of regulation on the manufactur of Fertilizers mixture.
4. Packing & Labelling of Fertilizers mixtures .
5. Appointment of enforcement agencies and creation of Quality Control Laboratories.
6. Banning of the manufacture or Imports and exports , sale of non standard , spurious or adulterated Fertilizers .
7. Price Control
8. Allocation of Fertilizers to various states .
9. Grant or refusal of certificate of registration.
10. Renewal of certificate of registration.
Different Schemes & Policy for Fertilizers under
GoI :
1 . Retention Pricing Scheme (RPS) - 1977

■ According to this Scheme , the difference between Retention price and the Statutorily
notified sale price was paid as a Subsidiy to each manufacturing unit .
Effects :
1. Increase in domestic production and Consumption of Fertilizers .
2. Fertilizer use led to increase in productivity of food grains .
3. This also leads to increase Subsidiy burden and ultimately increase in Fiscal Deficit .
 2.New Pricing Scheme (NPS) :

Aims :
To help the Urea units to achieve internationally competitive efficiency in Subsidiy
Administration .

Effects :
1. Distortion of the Fertilizers Market
2. Due to fixed price and the rising cost of inputs .
3. Imbalance in the use of Fertilizers. Also led to misuse Of it through illegal export.
3.Nutrient Based Subsidy (NBS) :
Aims :
It aims at ensuring the balanced use of Fertilizers , improving Agricultural productivity ,
promoting the growth of the indigenous Fertilizers industry and also reducing burden of
Subsidies .

Draw back :
1. Urea is not covered under this Scheme.
2. Delay in NBS Subsidiy payments , hence Fertilizers Companies focus more on Urea
than others
3. Increase in prices of Phosphoric and Potassic fertilizers.
4. Farmers overuse Urea. Hence, the ideal ratio of NPK is disrupted .
4. Neem coated Urea Policy – 2015

Aims :
To check the excessive use of Urea which is impacting the soil health and adversely
impact overall Crop yield . Maximizing indigenous Urea Production and promoting
energy efficiency in the Urea units .

Effects :
1. Reduce the Subsidiy outgo thus rationalizing the Subsidiy burden on the Govt.
Of India .
2. Prevent diversion of Urea for industrial use .
5. New Urea Policy (2015)
Aim :
To incentive domestic manufacturers and free transportation of P (Phosphorus) & K
(Potassium) Fertilizers .
Objective :
1. Maximize indigenous Urea Production
2. Promote energy efficiency
Impacts :
■ Reduce yearly Subsidiy Bill
■ Increase annual Production by 2 mT .
Drawback :
Doesn’t seek to reduce the Subsidiy on N,P,K Fertilizers .
6.Soil Health Card -2015 :
It provides every Farmers soil nutrients Status of his land and advice him accordingly on
the dosage of Fertilizers and essential soil ammendments that should be maintained for
good soil health .
It contains 12 parameters .
During Cycle I (2015-17) : 10.74 Cr. SHC registered
During Cycle II (2017-19) : 11.74 Cr. SHC has been registered .
Now a total of 429 Static Soil Testing Labs & 102 new Mobile Soil Testing Labs are
available all around the country .
Conclusion :
■ There are many Schemes or amended Schemes for Fertilizers implemented to regulate
the demand and supply of Fertilizers .
■ Also there are many State Govt . Scheme which promotes the Fertilizers Sector
■ Still Fertilizers industry need reforms as Facing many policy issues .