West Asia crisis opens space for fertiliser policy reform

📌 Summary:

• Context: PM Modi has called on Indian farmers to cut chemical fertiliser consumption by half and move towards "natural farming"

• Core argument: Editorial says the call may not be practical in current form, but the underlying intent — curbing demand and promoting judicious use — is sensible; the West Asia crisis creates a critical reform window

• Causal chain — why the West Asia / Strait of Hormuz crisis is a fertiliser shock: (1) Fertilisers supply N, P, K, S nutrients essential for crop yields; India has very little natural gas (urea feedstock), almost no rock phosphate, potash or elemental sulphur reserves (2) India is therefore heavily import-dependent for fertilisers and feedstock (3) Up to 30% of global fertiliser trade passed through the now-disrupted Strait of Hormuz — squeezing supply and raising prices (4) Successive governments have not only subsidised fertilisers (heavy foreign-exchange outflow) but also encouraged overuse of high-analysis products like urea (5) Result: skewed NPK ratio, soil degradation, fiscal stress, environmental harm

• Key data:

  • Up to 30% of global fertiliser trade transited the Strait of Hormuz until recently
  • Only a fraction of applied urea is absorbed by plants; the rest is lost via ammonia volatilisation or nitrate leaching to groundwater, polluting aquifers

• Solutions proposed: (1) Free or raise retail fertiliser prices to import-parity levels (2) Replace the existing product-wise subsidy regime with a per-acre direct payment (e.g. ₹5,000/acre) to all cultivating farmers (3) Combine savings from fertiliser subsidy with PM-Kisan into a unified direct income support scheme (4) Encourage efficient nutrient products and balanced NPK use over urea-only overuse

• Concluding takeaway: The crisis has made the current subsidy + price-control regime "fiscally and physically unsustainable" — when product availability is itself a problem, how much can the State subsidise?

🎯 UPSC Relevance: GS3 Indian Economy — Agriculture (fertiliser policy, subsidies, DBT, soil health); GS3 Energy (gas-based feedstock dependence); GS2 Governance (welfare reform via DBT).

📝 Prelims Facts:

• Urea is sold at a Maximum Retail Price (MRP) fixed by GoI — currently ~₹266.50 per 45 kg bag (heavily subsidised)
• DAP and other P&K fertilisers are under Nutrient-Based Subsidy (NBS) since 2010
• Ideal NPK use ratio is 4:2:1; India''s actual ratio is often skewed worse than 6:2.4:1
• PM-Kisan provides ₹6,000/year DBT to landholding farmers (3 instalments of ₹2,000)
• Strait of Hormuz handles ~30% of global fertiliser trade, ~20% of global oil, ~30% of global LNG

🔑 Key Term: Nutrient-Based Subsidy (NBS) — A subsidy system in place since 2010 for P and K fertilisers where a fixed per-kg subsidy is paid based on nutrient content; urea is outside NBS and remains under MRP control.