What Modi did not tell you about urea on Independence Day
In his address on Independence Day, Prime Minister Modi brought the welfare of farmers to the centerstage of the government's development initiative. He said diversion of urea to the chemical factories by unscrupulous operators had long haunted the farmer in the country. "We have tweaked the chemical composition of this essential fertiliser by coating it with neem in such a way that it is rendered useless for the factory owner and provides extra nutrition to the soil in the fields," he said. "Selling neem-coated urea has been made compulsory for all fertiliser outlets in the country. I caution the farmers against picking anything which is not neem-coated from the urea outlet," he added.
Coating urea with neem prevents its misuse as well as puts the fertiliser in slow release mode, nourishing the saplings for a longer period, and thus avoiding the repeated use of fertiliser. The process reduces pollution of groundwater. There is an increase in crop yield and efficient pest control management leading to savings. It also increases the shelf life of the product.
I was deputed as the chief vigilance officer of National Fertilisers Ltd during 2002-07. Neem-coated urea was first developed by NFL during that period under the dynamic helmsmanship of its C&MD PS Grewal. The project had the blessings of the then fertiliser secretary and presently the PM's principal secretary Nripendra Misra. It was the first company in India to be permitted by the government to produce and market neem-coated urea. The results had been encouraging and response of farmers very positive to this innovative product.
Urea is highly subsidised by the government for the farmers. Its unauthorised diversion for industrial use costs the national exchequer dearly. By one estimate, complete neem coating would help save at least Rs 4,500 crore annually on two accounts - reduced demand of the nitrogen-based fertiliser by checking illegal diversion and decline in use of neem-coated urea in comparison to normal one. As per other estimates, the savings could be even more.
In its non-agricultural applications, urea is used for dyeing, inks, coatings, plastics, paints, glues, animal feed and pesticides. And for adulterating milk!
According to a study conducted by Food Safety Standards Authority of India (FSSAI), 70 per cent of milk distributed in Delhi did not subscribe to the fixed safety norms. Among the various adulterants was urea.
Urea is also used in making bombs!
Rebels in the Northeast are increasingly being caught with raw materials used to prepare lethal bombs rather than firearms which used to be found on them earlier - urea being one of them. They are either being used as explosives with chemical additives or to magnify the intensity of RDX and TNT.
Neem-coating will ensure that the illegal industrial usage stops.
But what about the other consequences of subsidising urea? Such as smuggling?
Urea is smuggled from border states to Nepal, Bangladesh, Myanmar and Bhutan. Unlike in India, urea is not subsidised in these countries, thereby creating vast arbitrage opportunities.
When I was the CVO of Brahmaputra Valley Fertiliser Corporation Ltd in the Northeast, we had received reports in 2007 of urea being smuggled to Myanmar and I had proceeded to Imphal to investigate. It transpired that smuggling of urea into Myanmar through Imphal-Moreh route had been a regular affair. Later, the seizure of 13 urea laden trucks along Imphal-Moreh Road triggered an investigation by an IG of the state Police department. The investigation reportedly indicted both the state police and the Assam Rifles personnel for taking money from the fertiliser transporters for ensuring smooth passage along the Imphal-Moreh Road.
Smuggling was being done at opportune moments every now and then after stocking up the load at Thoubal and Kakching areas. There were check posts which demanded upto Rs 5,000 from each of the urea laden trucks.
Besides smugglers and urea owners, the personnel of police, Assam Rifles, CID, customs and forest, who were posted along this route, dipped their fingers into the illegal trade. The investigation led to identification of the stake-holders involved in this particular case.
Similarly, I had investigated a case of smuggling to Bhutan from North Bengal. However, in the coming years, smuggling to Bhutan would stop in view of Bhutan's policy of phasing out artificial chemicals in farming, making its staple foods of wheat, potatoes and fruits completely organic. The majority of farmers in Bhutan are already organic and reliant on rotting leaves or compost as a natural fertiliser.
What is the government doing to stop smuggling?
The Union home ministry has alerted the border guarding forces - Border Security Force, Indo-Tibetan Border Police, Assam Rifles, Shasastra Seema Bal and Coast Guard to maintain strict vigilance on the borders to curb smuggling. The ministry has identified border points which are suspected to be used by smugglers and is deploying additional forces equipped with state-of-the art equipment on these locations. With respect to Nepal, smuggling through the porous border is huge. The intelligence network has been strengthened and the respective state departments of agriculture and cooperatives have set up check posts in border districts.
Regarding Bangladesh, the Centre has deployed hi-tech surveillance equipment including long range reconnaissance and observation system and battle field surveillance radars at the Indo-Bangladesh border. Along the Indo-Myanmar border, several battalions have been deployed.
The other consequence of subsidising urea is black-marketing and hoarding. The artificial scarcity created every year in various parts of the country is normally not on account of inadequate dispatches by fertiliser companies but by unscrupulous dealers.
To cope with this problem, the fertiliser ministry reviews the situation on availability of fertilisers and their use with the state governments periodically. The state governments also take preventive/punitive action for violation of any of the provisions of Fertiliser Control Order (FCO) 1985 under the Essential Commodities Act, 1955 and initiate penal action including prosecution of offenders. Raids are conducted against the suspected dealers.
But the most severe consequence of subsidising urea is its rampant overuse.
Urea price has risen marginally since 2000 while prices of other crop nutrients like DAP have nearly tripled, and MoP has quadrupled. The growing price gap has led farmers to use urea indiscriminately.
It is indeed a matter of serious concern that the farmers have contaminated the soil with excessive use of urea. The overuse has made soil unproductive and robbed it of micronutrients essential for good crop production. This has resulted in stagnation in farm production. The usage of urea - almost 49 times more than the prescribed quantity - has seeped into the groundwater in several places.
The soil should be given a balanced dose of nitrogen, phosphorus and potassium - commonly known as NPK. The country must learn from China which has realised the need for using urea judiciously. The food grain yield by Chinese farmers is now double that of their Indian counterparts farming an area of equal size. China has mandated the use of green and biological fertilisers. They have gradually reduced the use of chemical fertilisers with an aim to rejuvenate the soil.
It is about time the government woke up to the grim reality. The subsidy on urea needs to be done away with, albeit in a phased manner. The attendant evils will of course go away, but the huge subsidy burden on the nation will also ease. Eventually, the government will need to promote the usage of compost and bio- fertilisers and reclaiming the soil by using recycled crop residue, green manuring, composting, use of bio- fertilisers and crop rotation. While neem-coated urea is a pragmatic approach in the short term, the long term solution is to get rid of chemical fertilisers.
Mizoram and Sikkim already use totally organic methods and some states are soon to follow suit. The rest of the country needs to follow their example.