Unproductive fertiliser policy

New fertiliser branding plan must be reviewed

The government’s “one nation, one fertiliser” policy, which mandates fertiliser products of different companies to be marketed under the single brand name of “Bharat”, is ill-advised. Although all fertilisers, whether imported or produced by the public, private or the cooperative sector carry a subsidy of almost 80 to 90 per cent, it does not justify the government’s claim over their brand value. Nor does it legitimise denial of an opportunity to the companies to create their own market space through brand promotion. Besides, it also seems to impinge upon the farmers’ right to buy the products of their choice. Moreover, it is unclear whether this step conforms to the provisions of the laws concerning brands and trademarks. What is worse, this move would serve as a disincentive for fertiliser companies to take up field programmes to introduce efficient methods of nutrient application as part of their market promotion activities.

That aside, there is another dimension of this move, even a veiled one, that cannot be ignored. The fertiliser companies have been instructed to carry on the bags the logo of the new scheme, called the Pradhan Mantri Bhartiya Janurvarak Pariyojna, which, notably, is abbreviated as PMBJP. Though this provision is aimed, avowedly, to indicate that the product is subsidised by the Union government, the political connotations of the logo are fairly obvious. The fertiliser ministry has gone on to suggest the design, with the colour scheme and font size, of the brand name Bharat and the logo PMBJP, so as to occupy at least two-thirds of the space on the bag. The companies can put their names and other details on the remaining one-third area.

No doubt, the fertiliser ministry sounded the industry about this measure before actually notifying it, but no firm dared to dissent, despite nurturing misgivings about it because all their business operations — from manufacture to the retail sale — are under the government’s control. The subsidy is released only after the sale transaction has been recorded in the digital devices installed at the sale outlets linked to the ministry’s control room. Such stifling controls are, actually, proving counterproductive by disincentivising fresh private investment in the fertiliser sector. In fact, some of the private players have exited this business in recent years because of these reasons.

The government has sought to defend its action on the plea that the present system is resulting in higher subsidy outgo, especially that of the freight subsidy, by encouraging criss-cross movement of fertilisers from one state to another. The fertilisers produced in Uttar Pradesh are being sold in Rajasthan and vice versa because the government reimburses the transportation cost. But this is a flimsy ground, given that the Fertiliser Control Order 1985 has enough provisions to curb such practices. A much better way for the government to get credit for subsidising fertilisers would be to pass on the subsidy directly to the farmers rather than using the industry as the conduit. The database and the infrastructure needed for direct benefit transfer already exist for implementing the scheme under which Rs 6,000 is paid annually to all farmers in three instalments. The government must not further mess up the already badly-managed fertiliser sector.