The Hindu Business Line : Single super phosphate subsidy hiked by 50 pc

THE Cabinet Committee on Economic Affairs (CCEA) on Thursday decided to increase the subsidy on single super phosphate (SSP) fertiliser by 50 per cent from the existing Rs 650 a tonne to Rs 975 a tonne on an ad hoc basis following recommendations from the Committee of Secretaries.

The SSP industry had been demanding that the subsidy be raised to Rs 1,300 a tonne. The industry has also demanded that the maximum retail price (MRP) for SSP be decided by the Central Government as it is for all fertilisers. As of now, the State Governments decide the MRP for SSP.

Though the Finance Ministry has refused to take the responsibility of fixing the MRP, the CCEA decided that the State Governments should be advised to maintain the same level of MRP.

This is in reaction to industry apprehensions that some State Governments may reduce the MRP of SSP ahead of the forthcoming Assembly elections by the same amount by which the Centre would increase the subsidy component.

The SSP industry had been crying hoarse for several years now claiming that their operations were becoming uneconomic because of the increased input costs, particularly sulphur and rock phosphate.

This increase in subsidy will help to revive the SSP industry and will also help to reduce the pressure on the Government from the international suppliers of phosphoric acid and DAP manufacturers, an official release said.

SSP is poor man's fertilisers and is mostly used by low and marginal farmers who are dependent on rain. The SSP availability to the farmers over the last few years were declining continuously and this was also affecting the industry adversely.

Currently, there are 70 domestic manufacturers of SSP with installed capacity of 64 lakh tonnes whereas actual production has come down to 23 lakh tonnes, which is only 36 per cent of the installed capacity.

The consumption of SSP and DAP in 2002-03 has been 25 lakh tones and 55 lakh tones respectively. The consumption of SSP has come down from 84 per cent of DAP in 1991 to 46 per cent of DAP consumption in 2002-03.

SSP contains 16 per cent phosphate as against 46 per cent in DAP. In addition, SSP contains other nutrients such as sulphur, calcium and pyrites.

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E.B. Sethna is Upasi President