Home Insights One Nation One Fertilizer – IMPRI Impact and Policy Research Institute

One Nation One Fertilizer – IMPRI Impact and Policy Research Institute

16
0
One Nation One Fertilizer - IMPRI Impact and Policy Research Institute

Bhanvi Bansal

Abstract

The government issued an order requiring all businesses to market their goods under the brand name “Bharat” in order to standardize fertilizer brands across the nation. Under this scheme, all fertilizer companies will be manufacturing fertilizers under one brand name which will ensure uniformity and reduce confusion among farmers. The budget for fertilizer subsidies has been increased to 25% as compared to last year. This scheme will also ensure cost-effectiveness.

Background

After the implementation of the One Nation One fertilizer scheme, it is anticipated that the fertilizer subsidy bill could reach the Rs 2 lakh crore mark in 2022-23, which represents a surge of 25 percent as compared to Rs 1.6 lakh crore the previous year. This scheme was implemented when the Union government’s spending on fertilizer subsidies was escalating, especially after the turmoil in Ukraine that triggered a rise in the price of energy and chemical nutrients.

Before the implementation of the One Nation, One Fertiliser scheme government was bearing subsidy costs of around 80-90% for Urea and 66 % cost of DAP, though the government was bearing price it was not showing any fruitful results. During that period, every company was selling similar nutrients under different brand names causing confusion, and the second problem was their transportation as they transported them to different places by incurring transportation costs that increased the cost price of fertilizer. So, to remove all these inconveniences one nation one fertilizer scheme was implemented.

 What is the Scheme?

“Now the urea sold in the country will be of the same name, same brand and same quality and this brand are Bharat! Now urea will be available only under the ‘Bharat’ brand name in the entire country ”, Shri Modi remarked.

The Ministry of Chemicals and Fertilisers declared on August 24 that it will be implementing  One Nation One Fertiliser by introducing a “Single Brand for Fertilisers and Logo” under the fertilizer subsidy scheme named “Pradhanmantri Bhartiya Janurvarak Pariyojna” (PMBJP) and it was launched by Prime Minister Narendra Modi on the occasion of the inauguration of the two-day event “PM Kisan Samman Sammelan 2022” on 17th October.

One Nation One Fertilizer (ONOF)Scheme, aims to standardize fertilizer brands across the country, regardless of the firm that manufactures it, by including  all types of fertilizers, including DAP (di-ammonium phosphate), NPK (nitrogen, phosphorus, and potassium), and urea, under the brand name “Bharat.”It focuses on increasing transparency and affordability of fertilizers among the farmers by terminating black marketing of fertilizers by merging all brands under one umbrella brand.

Under this scheme, companies are only permitted to advertise their name, brand, logo, and other pertinent product information on one-third of fertilizer bags under the new “One Nation One Fertiliser” initiative. The “Bharat” brand and Pradhanmantri Bharatiya Jan Urvarak Pariyojana logo will be required to be exhibited on the remaining two-thirds of the space.

Rationale

  • The main purpose of launching the ONOF scheme is to prevent farmers from confusion as DAP fertilizer requires the same composition of nutrients. This scheme will club various companies producing the same fertilizer under a single brand i.e. “Bharat”.
  • ONOF is by far India’s most considerable fertilizer effort. The Center’s action unifies fertilizer brands nationwide, regardless of the company that manufactures them, and will ensure uniformity in the fertilizer market and ensure product differentiation under the same type of brand.
  • Preventing the interlaced movement of fertilizers, it will assist in saving transit time and cost as a single brand name will aid in lowering freight costs and guarantee their availability all year long regardless of brand preferences.

Implementation

This scheme was implemented on October 2, 2022, with the introduction of new fertilizer bags, and fertilizer companies were not allowed to buy bags of old design from September 15 and will have to remove these bags from the market by December 2022. In addition, the prime minister unveiled Indian Edge, an e-magazine about fertilizers. According to the PM, the magazine will provide details on domestic and international fertilizer scenarios, including recent advancements, analyses of price trends, availability and consumption, and farmer success stories, among other things.

Challenges

  • After the implementation of the scheme, it is being assumed that the market can suffer dilution of brand value as all bags will look the same and mainly under the brand name of Bharat and logo Pradhanmantri Bharatiya Jan Urvarak Pariyojana which will hamper brand loyalty.
  • This scheme will cause a great hurdle for manufacturers as there would be a significant reduction in their profit margins and they will have to incur huge expenditures in the form of marketing and promotional strategies to maintain a hold on their market share and growth.
  • With the introduction of ONOF, it will be more difficult to charge more for some fertilizers, and new product launches will be more expensive because there will be no well-known brands to advertise them.
  • The government has also provided information about where manufacturers can sell in addition to subsidizing them and setting the price at which they can sell. It was facilitated by The Fertiliser (Movement) Control Order, of 1973. Following this, the department of fertilizers, in cooperation with producers and importers, develops an agreed-upon monthly supply plan for all fertilizers subject to subsidies that will confine the reach of sellers in restricted areas. 
  • Currently, the companies were witnessing huge drawbacks if there is any damage or the bag of fertilizers is not meeting the desired standards then the blame is put on the company but now that should be shifted to the government.

Performance

 “Moving forward towards self-sufficiency in urea production, India will soon produce Nano Urea,” said the PM.

Nano Urea is cost-effective and is required in low quantities. The fact that Nano Urea has no effect on the environment is by far the most important advantage of utilizing it in agriculture. As a result, greenhouse gas emissions will be reduced, and air and water quality will also improve. During the crisis before 2014, fertilizers were sold in the black market due to which farmers’ rights were snatched and they had to face lathis. Moreover, nano urea is a medium to produce more at the least cost and a  sack of urea can be replaced by a single-use bottle of Nano urea. 

Conclusion

It can be concluded that after proper implementation of the scheme it can prove to be beneficial as it will ensure uniformity, standardization, and levelness but on the same hand, it can prove hazardous for manufacturing firms and suppliers as they have to merge with government brands only so for the long run continuation of the scheme government needs to put a limit on the maximum amount of subsidy that farmers can get and ensure the benefit of the scheme so that it can penetrate to the roots.

Way Forward

  • A proper database needs to be maintained so that government has proper information on the desired beneficiaries, then only the benefit of the scheme can reach to intended beneficiaries.
  • Since the government is providing subsidies so government should put a cap on the limit of fertilizers that farmers can buy during specific farming seasons.  

References

(2022, October 17) https://pib.gov.in, Press Information Bureau

(2022, August 25)  The One Nation One Fertiliser scheme, the Govt’s logic, and some immediate risks, Indian Express

(2022, October 17) One Nation One Fertilizer scheme: What it is and how it will help farmers – Explained | Zee Business

(2022, August 26)Old schemes, now with ‘PM’ branding — what is govt’s ‘One Nation One Fertiliser’ initiative, The Print

(2022, October,19) One impact of the One Nation, One Fertiliser scheme is margin squeeze, CRISIL

 (2022, October 17)PM Modi launches single brand ‘Bharat’; Here’s what it means for farmers | Mint

 (2022, December 8) PM’s farm outreach: ‘One nation, one fertilizer’- The New Indian Express, Rajesh Kumar Thakur and Dilip Singh Kshatriya/ Indian Express

  • IMPRI, a startup research think tank, is a platform for pro-active, independent, non-partisan and policy-based research. It contributes to debates and deliberations for action-based solutions to a host of strategic issues. IMPRI is committed to democracy, mobilization and community building.

  • Bhanvi Bansal

    Research Intern at IMPRI. Pursuing Bcom (H) from Shri Ram College of Commerce, DU

  • Satyam Tripathi

    Research Intern at IMPRI. Pursuing M.A. in Defence and Strategic Studies

Previous articleThe Urban Land Crisis: Haldwani Case and Beyond – IMPRI Impact and Policy Research Institute
Next articleMission Karmayogi: Civil Servants Capacity Building Program – IMPRI Impact and Policy Research Institute
IMPRI, a startup research think tank, is a platform for pro-active, independent, non-partisan and policy-based research. It contributes to debates and deliberations for action-based solutions to a host of strategic issues. IMPRI is committed to democracy, mobilization and community building.

LEAVE A REPLY

Please enter your comment!
Please enter your name here