New Delhi, June 12 : Keeping in view the interests of the farmers and to promote balanced use of fertilizers, the Cabinet Committee on Economic Affairs today approved a nutrient based pricing regime for all subsidised fertilizers.
Further it has been decided to fix the farm gate price of nutrients at the level of their existing price in straight fertilizers viz., Urea, DAP, MOP and SSP. This will lead to significant reduction in existing Maximum Retail Prices (MRPs) of complex fertilizers.
Under this regime, the farm gate price of each nutrient will be uniform across all subsidised fertilizers.
The selling price of subsidised fertilizers will be determined on the basis of the nutrients contained therein. The necessary notifications will be issued within the next fifteen days.
Under existing pricing regime, the price of nutrients in complex fertilizers was higher than the price of same nutrient in other straight fertilizers like Urea, DAP, MOP and SSP.
This led to comparatively higher usage of straight fertilizers vis-a-vis complex fertilizers which are agronomically better fertilizer products.
The nutrient based pricing will lead to parity in price of complex fertilizers with other straight fertilizers and, thus, is expected to promote balanced fertilization by encouraging usage of complex fertilizers. It will be implemented with effect from April 1, 2008.
To ensure easy availability of fertilizers all over the country, the Cabinet Committee on Economic Affairs today also approved a uniform freight subsidy regime for all subsidised fertilizers, wherein freight subsidy will be paid separately on receipts of all subsidised fertilizers in the districts/blocks.
The freight subsidy will constitute of two components, namely, rail freight and road freight. The rail freight will be paid on actual, and the road freight will be paid on a normative average district lead (average of the actual leads of block headquarters from the nearest rail rake point) and a normative per kilometer rate.
The uniform freight subsidy regime will facilitate availability of fertilizers in all parts of the country, especially in areas, which are far from the production facilities and ports by reimbursing freight on actuals.