Will 'one nation one fertiliser' lead to uniformity or anonymity?

Under 'One Nation One Fertiliser' all fertiliser bags, irrespective of their contents or the company that manufactures them, will carry a uniform brand name called "Bharat"

The Union Ministry of Chemicals and Fertilisers on Wednesday issued an order directing all manufacturers to sell their products under a uniform brand name, “Bharat”. What does the order entail for fertiliser companies and how does it differ from branding of products practised so far? Here are the answers:

What is the order all about?

The government has rolled out a concept of “One Nation One Fertiliser” under which all fertiliser bags, irrespective of their contents or the company that manufactures them, will carry a uniform brand name called “Bharat”. The brand name will be tagged with the name of the scheme under which the government grants subsidy to the fertiliser manufacturers.

Thus, a urea bag will bear the name Bharat Urea, or if it is a DAP (di-ammonium phosphate) bag it will be known as Bharat DAP. So far, as with any other products, fertiliser companies market products using their own brands. Being a mass-market product category, fertilisers have colourful brand names like “Kisan”, “Paras” that are also easily identifiable.

Does it mean that companies won’t be allowed to give any reference of theirs in the package?

No, each fertiliser bag is allowed to carry the manufacturer’s name. But it will find mention on a small proportion of the bag, as a bulk of it will be covered by the Bharat logo and name of the subsidy scheme.

What is the subsidy scheme called?

The central government has always subsidised fertilisers to ensure growers are not financially burdened. It has now named the subsidy scheme Pradhan Mantri Bhartiya Janurvarak Pariyojna (PMBJP). The logo is also part of the One Nation One Fertiliser concept.

What is the logic behind the change?

The government has not officially spelt out a rationale, but according to industry sources it was sought to bring about uniformity since the government subsidises a significant portion of the fertiliser costs. In some products, such as urea, the subsidy goes up to almost 90 per cent. So, it was natural that the products carry a government brand name, they added.

How have fertiliser companies reacted to the move?

The big fertiliser players have not publicly responded to the government decision. However, several company officials, who spoke requesting anonymity, say that this is a retrograde step that will push them to lose brand identity built over decades. They also say that if the brand names are jostled out, companies will become mere suppliers of products with little incentive to innovate in a complex space.

Brands act as a key differentiator between two similar products. Companies charge a premium for their brands depending upon the quality, which is a factor, albeit minimal, in the fertiliser segment. Companies also carry out outreach activities such as field-level demonstrations and farmer engagements where their brands are prominently displayed. Such initiatives will now effectively cease.

“The policy would discourage private players from committing to new projects in the coming years. With almost every aspect of fertiliser manufacturing regulated by the government, the sector already has very few private players. Private participation will be impacted badly down the line,” Kalyan Goswami, director general, Agro Chem Federation of India, told Business Standard.

Since when will the order come into force?

The order will come into effect starting on the occasion of Gandhi Jayanti that falls on October 2. Companies have been given four months to make the transition by disposing of old inventory and starting with labelling new stock.