A first: After the success of nano urea, nano-DAP soon for farmers

The government, after the success of nano urea, is working on introducing nano di-ammonia phosphate (nano DAP), which could be a game changer because of its higher effectiveness at a lower cost.

This could have an impact on the fertiliser subsidy bill as well as foreign exchange because DAP is consumed most after urea. Half the country’s annual consumption of DAP is imported.

Nano urea is essentially urea in the form of a nanoparticle where all the properties of urea are concentrated in liquid form to produce a greater impact. According to the information available, while conventional urea has an efficiency rate of 25-30 per cent, that for nano urea can go up to 90 per cent.

Fertiliser major IFFCO has been asked to do the groundwork on this.

According to preliminary estimates, a 500-litre bottle of nano DAP is expected to be priced at around Rs 600, which is less than half the subsidised price of a 50-kg bag of DAP at Rs 1,350. “There are attempts to even get nano DAP patented,” a senior official said.

A few weeks ago, Prime Minister Narendra Modi, while inaugurating the world’s first nano urea plant in Gujarat, had asked scientists and technicians to work on producing more such products.

Terming the technology “revolutionary”, Modi had said a small bottle (500 ml) of nano urea was equivalent to one 50-kg bag of granular urea that farmers use.

He said it could bring the logistics cost of urea to almost zero.

In the case of nano DAP, too, the gains for all in the value chain could be significant.

A major chunk of the subsidy on non-urea products is absorbed by DAP because it has wide usage and is one of the main plant chemicals consumed during the rabi season.

In FY23, the Centre had budgeted for a fertiliser subsidy of around Rs 1.05 trillion, of which almost 40 per cent is for non-urea fertilisers.
 

However, with fertiliser prices shooting up owing to the Russia-Ukraine war, the government in April approved an additional subsidy of Rs 60,939.23 crore for non-urea fertilisers for the first six months of this fiscal year. This would enable companies to continue selling farmers vital soil nutrients at affordable rates.

After the latest round of subsidy support, companies are able to sell one bag of DAP at Rs 1,350 because the Centre will absorb the remaining cost, estimated to be around Rs 2,500.

The subsidy approved for both DAP and NPKS (various grades) is almost 45.23 per cent more than that allocated for non-urea fertilisers, according to the Budget Estimates of FY23.

So, for non-urea fertilisers, the Central government had allocated Rs 42,000 crore in the Budget for FY23, while it announced an extra amount of Rs 19,000 crore, that too just for the first six months of this fiscal year till September.

In the case of urea, the Centre fixes the maximum retail prices and reimburses the difference between the maximum retail price and production cost in the form of subsidy.