Fertiliser dept looks to SC to settle pricing cases
Fertiliser dept looks to SC to settle pricing cases
The Department of Fertilisers will shortly move the Supreme Court (SC) to get the pending cases across various courts in the country against its single super phosphate (SSP) fertiliser pricing policy heard at one court.
The move comes in the backdrop of stay orders obtained by some SSP manufacturers against the policy from the high courts of Andhra Pradesh, Madhya Pradesh and Chhattisgarh.
These companies have opposed a clause in the SSP policy, which disqualifies fertiliser firms producing less than 100,000 tonnes from undertaking direct sales.
According to government sources, the department may not be able to clear the subsidy bills claimed by SSP suppliers in these states unless the stay orders against the policy are vacated.
Since the fertiliser manufacturers realise over two-thirds of their retail price as subsidy reimbursements, any uncertainty regarding the repayment of subsidy bills will result in the shortage of SSP fertiliser in these states.
While a tonne of SSP fertiliser is sold to a farmer for Rs 3,400, its actual price, the balance of which gets reimbursed by the government, comes to Rs 9,277. In the case of imported SSP fertilisers, this comes to about Rs 15,000 a tonne.
SSP manufacturers are expected to sell to the farmers at an amount fixed by the government and claim the balance from the government as subsidy on a monthly basis.
The new policy had disqualified all small-scale SSP manufacturers with a capacity of less than 100,000 tonnes per annum from selling their products directly and required them to market their products through bigger players.
The responsibility to maintain the quality of those products rests upon the marketing partner, who in turn is eligible to claim the subsidy from the government. The SSP makers, predominantly small players, saw this to be a discrimination, and hence the pending litigation.
SSP, a cheap and effective alternative to diammonium phosphate (DAP), is primarily used in oilseeds, pulses, sugarcane and horticulture cultivation.
With the advancing monsoon demanding higher quantity of SSP in most parts of the country, any technical problem that could result in reduction of SSP production or supply can invite major protests from farmers of these states, industry sources said.
