Fertilisers and Fertiliser Workers

Agricultural production in our country has increased substantially since Independence. Today, we are able to meet the domestic requirement of food grains. As per records, more than half of the enhanced production is due to the use of fertilisers. In absolute terms consumption of N+P+K fertilisers per hectare of arable land in our country has increased from less than 1 kg per hectare in 1951-52 to around 130.8 kg in 2016-17. But still this is far behind the fertiliser consumption in developed countries and even less than that in some developing countries.

The food grain production in our country at present is 275.7 million tonnes. It is estimated that, to meet our country’s demand due to the growing population, it is necessary to increase food grain production to around 310 million tonnes by 2025.

In view of limited scope for increasing the land area under cultivation, further increase in agricultural production can be achieved only through better water management, expansion of the area under irrigation, improved farming practices, research and development in scientific use of inputs and seeds and the last but not the least, more extensive and balanced use of fertilisers. Hence fertilisers assume importance in Indian economy, particularly in improving the economic conditions of our rural population, in creating a prosperous rural base. There is ample scope to produce the necessary fertiliser nutrients in the country and then only the country can be transformed into a food grain surplus nation.

Fertiliser Capacity At A Glance

At present there are 30 large size urea manufacturing units in the country. Besides, 21 units produce DAP and complex fertilisers and 2 units manufacture ammonium sulphate as a by-product. In addition to the public and private sectors, the cooperative sector like Indian Farmers’ Fertiliser Cooperative Ltd (IFFCO) & Krishak Bharati Cooperative Limited (KRIBHCO) has also been operating in the fertiliser industry. The total indigenous production capacity of urea and DAP & complex fertilizers in the country was 207.54 and 146.00 million tonnes respectively in 2016-17.

Domestic Production, Demand and Import

The demand for fertilisers has been increasing at the rate of 5% every year. But indigenous capacity for production has not increased accordingly. There has been virtually no capacity addition during the last 25 years of neoliberal regime. As a result, our country has largely become import dependent. There is no reserve of any potash in our country; the entire requirement is made up through import only. Urea, DAP and even the complex fertiliser NPK have been imported in large quantities in the preceding years. The import bill for fertilisers has risen astronomically. This is a matter of great concern

Dismantling Of Public Sector Fertiliser Companies

Public Sector was in the commending height in fertiliser production in the post Independence period. Sindri Fertiliser Plant was actually the first public sector industry in the country centring which, some 14 plants and one Planning & Development Organisation with fertiliser research activity were set up under the banner of Fertilizer Corporation of India. In the late 1970s, this was split into 5 companies viz, Fertiliser Corporation of India Limited (FCIL), Hindustan Fertiliser Corporation Limited (HFCL), National Fertilisers Limited (NFL), Rashtriya Chemicals and Fertilisers Limited (RCF) & Projects and Development India Limited (PDIL). In addition there were some more public sector plants under Fertilisers And Chemicals Travancore (FACT), Madras Fertilisers Limited (MFL), Pyrite, Phosphate and Chemicals Limited (PPCL) and Paradip Phosphates Limited (PPL). But this dominance was not allowed by the government after the advent of neoliberal regime in the country. Disinvestment of profit making companies like RCF, NFL, MFL & PPL started. Though even today government holds majority shares in these companies, the manner in which the present BJP led government is going on a privatisation spree, what will happen tomorrow is any one’s guess.

In its eagerness for privatisation and push forward its neoliberal agenda, the erstwhile BJP led NDA government argued that production of fertilisers in the country was uneconomical; that the machinery and processes of production in the existing units have become obsolete; that fertilisers was available in the international market at throw away prices. On that plea, in 2002- 2003, it has closed down seven public sector urea producing units, mostly in the eastern region of the country – Sindri (Jharkhand), Barauni (Bihar), Durgapur and Haldia (West Bengal), Gorakhpur (Uttar Pradesh), Ramagundam (Telangana) and Talcher (Odisha). Simultaneously, 3 phosphotic fertiliser plants of PPCL were also closed down. Since the late 1980s, several private and cooperative fertiliser manufacturing plants have come up. In course of time, production in the private sector surpassed production of fertilisers in the public sector.

Post Closure Situation

The situation after the closure of so many public sector units in the fertiliser sector has been horrifying. The decision clearly lacked foresight. Since 2003, our country has increasingly become import dependent in the case of fertilisers. In 2015-16 we imported 183.54 lakh tonnes of fertilisers worth Rs 525 billion. If only urea, DAP and complex fertilisers are taken into account, around 37% of indigenous production had to be imported in 2015-16, whereas in 2002-2003, we imported hardly 1-2%. The international price of urea in particular did not remain static. It went on increasing in geometric proportion, from USD 80-120 per tonne to USD 800 per tonne. Today, for fertiliser like DAP we depend almost entirely on Morocco and China. While huge subsidies are given to companies which import phosphates, the benefits do not accrue to farmers as after decontrol, the farm gate prices are decided by these companies. Yet, successive governments at the centre, during the last fifteen years, went on dillydallying on the issue of reviving the closed fertiliser plants or opening new urea producing units. As integral to neoliberalism, they were hoping and waiting for the private investors to invest in the sector.

But the fertiliser industry is highly capital intensive. The technology is sophisticated. Process know how is required to be obtained from foreign licensors. Above all, profitability in the sector is quite low in comparison to other sectors. Thus it did not prove to be of much attraction to the private sector. After a long wait, the government had ultimately to come to the conclusion that reviving the public sector fertiliser units was the option. It was recently decided to revive five out of the seven closed urea plants in Sindri, Barauni, Gorakhpur, Ramagundam and Talcher through a consortium of various public sector companies like RCF, NFL, GAIL, CIL, NTPC and EIL etc. But, in a discriminatory move, no decision was taken to revive the Durgapur and Haldia plants in West Bengal, reportedly due to reluctance of the TMC ruled state government to sacrifice some long standing dues.

Massive Contractorisation

Under the neoliberal regime, the history of employing regular workers in the fertiliser sector has also been diluted. As in other sectors, rampant contractorisation and outsourcing of various perennial activities have become the order of the day. The number of contract workers in the industry has now surpassed the number of permanent workers. Needless to say, the contract workers are paid only a third or fourth of the wages of the permanent workers; they are deprived of all other benefits.

Conclusion

Fertiliser, as one of the key agricultural inputs, has been playing a pivotal role in augmenting the food production and ensuring the essentially necessary food security of the country. The country is already facing acute shortage of fertilisers. The successive governments, ministers and bureaucrats have made the country import dependent. Farmers are confronting heavy price rise of all ingredients like seeds, fertilisers, insecticides etc. Availability of all the ingredients in time which was earlier ensured by the government has now been left to the markets. The government has almost done away with public distribution system. Farmers are not getting remunerative prices for their produce and are gradually losing interest on cultivation. Farmers’ suicide all over the country has already become a matter of serious concern. At this hour of serious crisis in agriculture, that would affect the food security of the country, ensuring indigenous availability of fertilisers assumes importance. However, successive governments committed to the neo liberal regime have failed miserably to do this. Instead, the ongoing fertiliser policies of the government are factually pushing the country to a much difficult situation. The situation demands a united movement of the workers and peasants against the policies of the government. 

2018

Published by Centre of Indian Trade Unions