12
—Lancaster Farming, Saturday, August 24,’ 1974
India Hopes To Have More Fertilizer in ’74-5
By John B. Parker, Jr.
Foreign Demand and
Competition Division
Economic Research Service
US Department
of Agriculture
Fertilizer use in India
during 1974-75 is expected to
increase about 8 percent
well below the average
annual increase of 31 percent
recorded between 1967-68
and 1971-72, but an im
provement over the 3 per
cent gain of 1973-74.
About 3 million nutrient
tons of fertilizer are ex
pected to be applied in 1974-
75, compared with 2,783,000
tons in 1972-73 and only
1,165,000 tons m 1967-68.
Government surveys in
dicate that India’s farmers
would have used 4.4 million
nutrient tons of fertilizer this
year and 3.8 million tons last
year, had supplies been
available at prevailing
prices. However, the
Government’s fertilizer
consumption estimates
consistently have been more
than 25 percent above actual
use.
Expansion of fertilizer use
has been one of the major
achievements of the Green
Revolution, and it has been
closely related to the spread
of high-yield varieties of
cereals, improved irrigation,
and multiple cropping.
Since the physical land
area suitable for growing
crops is not expected to
increase by even 8 percent in
the next 10 years, most
future production gains must
come from higher yields and
multiple cropping. Ex
panding fertilizer use clearly
ranks among the major
priorities outlined m the
Fifth 5-Year Plan (1974-75
through 1979-80).
India’s fertilizer situation
has changed often in the past
decade. The 1966-68 shortage
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changed to a surplus in 1969-
71, but shortages have
prevailed since 1972. Stocks
of nitrogen fertilizer ac
cumulated during the sur
plus period are now
declining rapidly.
During the late 1960’5,
fertilizer prices were held
relatively constant at levels
that encouraged farmers to
use more. Striking gains in
crop prices received by
farmers contributed to a rise
in demand for fertilizer,
despite higher prices. But
Indian farmers still pay less
than world prices, primarily
because of Government
ceiling prices and regulation
of marketing margins.
By 1980, India probably
will be the world’s largest
fertilizer importer, with
foreign supplies accounting
for about 40 percent of the 5.7
million nutrient tons that are
expected to be consumed
annually. Shortages of
feedstocks may prevent
India from reaching fer
tilizer production targets.
But output of fertilizer in
1979-80 may reach 3.3 million
nutrient tons (2.5 million
nitrogen and 800,000
phosphate) if arrangements
can be made to allow foreign
investment. This situation
still would leave an import
need of more than 2 million
tons.
Some of the larger fer
tilizer manufacturing
facilities now being built will
use coal one of India’s
ample resources and
natural gas as feedstocks.
Naphtha, the raw material
currently used in the
manufacture of about 70
percent of India’s nitrogen
fertilizers, is a petroleum
byproduct. About 1.2 tons of
naphtha are required to
produce 1 ton of nutrient
fertilizer. The price of this
raw material accounts for
about 35 percent of the direct
cost of nitrogen production,
and therefore is critical to
total fertilizer production
cost.
Expanded planting of high
yield varieties of cereals
from 4.6 million acres in
1966-67 to about 60.5 million
acres in 1973-74 was major
factor in rising demand for
fertilizer. Higher farm
prices, expanded irrigation
facilities, and multiple
cropping also boosted
demand. India’s fertilizer
output increased from
400,000 nutrient tons to 1.4
million nutrient tons bet
ween 1967-68 and 1972-73. Yet
India’s total fertilizer output
has continued to lag behind
burgeoning demand.
Fertilizer factoties in
India consistently have
operated at less than 60
percent of capacity,
although the newer plants
perform at a somewhat
higher level. The opening of
new plants should enable
India to boost output of
nitrogen fertilizer to 1.3
million nutrient tons in 1974-
75, and output of phosphate
fertilizer to 376,000 nutrient
tons.
Both the timing and the
volume of monsoon rainfall
greatly influence the benefit
India derives from fertilizer
applied to rice a crop that
received 31 percent of the
1973 fertilizer supply. Fer
tilizer used by rice farmers
during 1973-74 was estimated
at 860,000 nutrient tons. Total
usage'of rice in 1974-75 might
reach 1.1 million nutrient
tons if monsoon rainfall is
favorable.
Another 25 percent of the
1973 total fertilizer supply
went to wheat fields, 18
percent to sugarcane, and 12
percent to coarse grains.
It is difficult to predict
accurately just how much
additional gain could be
obtained from extra fer
tilizer because of the great
variations in rainfall. The
supplemental gram that
might be obtained by ap
plying an additional 1 million
nutrient tons of fertilizer in
India could range from 3
million tons of gram with
poor timing of rainfall to as
much as 17 million tons
under ideal conditions.
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fertilizer is obtained during
the winter growing season on
irrigated land. Benefits
during the summer mon
soon season are usually
much lower.
India’s plans for a quick
boost in grain production are
beset by numerous
problems. The timing of
fertilizer deliveries to
growing areas, for example,
is of great importance to
farmers. Availability of
credit or lack of it for
purchase of fertilizer greatly
affects consumer sales.
Cooperatives provide most
of the financing of fertilizer
sales in India.
The Fertilizer Corporation
of India (FCI), a public
agency, sells fertilizer only
for cash. Inability to obtain
credit can be a deterrent to
purchases by small farmers.
Indian farmers have faced
increased taxation of inputs
in recent years. In March
1969 a 10 percent excise tax
was levied on fertilizer, and
in 1972 an additional 5 per
cent excise was im
plemented.
Greater output by new
fertilizer factories that
recently began operating at
Goa, Durgapur, and Cochin
should boost India’s fer
tilizer output to about 1.7
million nutrient tons in 1974-
75. Fertilizer imports are
expected to rise from the 1.24
million nutrient tons
reported for 1973-74 to about
1.4 million nutrient tons
during 1974-75.
Farmers in progressive
areas particularly in
Punjab and Haryana use
about 40-45 percent of the
optimum rate of fertilizer
application, but the average
for all India still is less than
25 percent. Farmers are
convinced that using fer
tilizer will improve their
yields. Yet few farmers will
follow Government research
recommendations and apply
the optimum amount the
level reached when ad
ditional fertilizer does not
brmg extra profits.
Most farmers prefer
granular fertilizer, applied
by hand. The situation in the
mid-1960’5, when many
farmers would not use
fertilizer, has changed
greatly. About half of the
farmers now use some
fertilizer, compared with
less than 15 percent a decade
ago.
Excellent opportunities to
make profits from growing
high-yield varieties of
cereals have been a major
factor in the booming
demand for fertilizer. Higher
prices of sugarcane, cotton,
tobacco, and coffee also have
bolstered demand for fer
tilizer.
Manufacture of nitrogen
fertilizer in India expanded
steadily from 309,000
nutrient tons in 1966-67 to
1,054,900 tons in 1972-73,
mostly because of the
opening of new factories. In
the first 9 months of 1973-74,
production lagged behind the
previous year, but output
from the new factory at Goa
pushed the 1973-74 total to
about 1.07 million nutrient
tons.
The country’s largest
fertilizer factory is near
Baroda, Gujarat. It is
operated jointly by a private
firm and the Governments of
India and Gujarat. Output
there increased from 40,000
nutrient tons of nitrogen
fertilizer in 1967-68 to 203,000
nutrient tons in 1972-73, but
shortages of imported
naphtha and power problems
ra
re
caused a dip in production in
Fertilizer factories
operated privately or Jointly
by foreign companies and
the Indian Government have
had a good record of
production gains. Privately
operated factories at
Baroda, Visakhapatnam
Kanpur, and Madras
produced 497,000 nutrient
tons of fertilizer in 1972-73
compared with only 47,000
tons in 1967-68.
India’s manufacturers are
beginning to use phosphate
mined in Rajas.han. The
higher cost of imported
phosphates has accelerated
plans to mine phosphates in
India. About 31 small fac
tories produce super
phosphates, and seven
larger factories produce
complex fertilizer containing
phosphate. No potash is
mined or produced in India.
The large new factories at
Madras, Goa, and
Visakhapatnam are capable
of producing complex am
monium phosphate fer
tilizers containing both
nitrogen and phosphate.
Factories in India had the
capacity to manufacture
more than 2.1 million
nutrient tons of nitrogen
fertilizer in January 1974.
The new factory at Goa that
began production in late 1973
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