The ongoing conflict involving Iran and the US-Israel has heightened the government’s concerns over fertiliser availability in the country. Amid global supply disruptions and rising prices, ensuring adequate and timely supply of fertilisers to farmers has become a significant challenge. In response to these emerging pressures, the central government has initiated the development of a new system for the distribution of subsidised fertilisers.
Preparations are underway to roll out a proposed mechanism titled the ‘National Framework for the Sale of Subsidised Fertilisers’. Under this system, fertiliser sales will be linked to landholding and crop-specific requirements. In the case of urea, the initial limit is likely to be set at around five to six bags per hectare.
According to senior government sources, the issue was discussed at a meeting of the Empowered Group of Secretaries on Monday, following which the Ministry of Agriculture was tasked with preparing the framework. The proposed need-based fertiliser distribution system is likely to be rolled out within a month.
As per information gathered by Rural Voice, a pilot project is set to be launched in select states, including Haryana and Telangana, where fertilisers will be supplied to farmers based on landholding and crop patterns. The government is emphasising that fertiliser allocation should be aligned with the specific nutrient requirements of crops.
Under the proposed system, details of fertiliser sales to farmers will be recorded on the Integrated Fertilizer Management System (IFMS), enabling authorities to track repeat purchases by the same farmer. The move is aimed at curbing the misuse and diversion of subsidised fertilisers such as urea and DAP.
In Haryana, the state government has already linked fertiliser sales with land records and crop details by integrating the Meri Fasal, Mera Byora (MFMB) portal with the IFMS. This initiative has led to a reduction in urea consumption by 1.26 lakh tonnes and DAP usage by 23,500 tonnes, resulting in an estimated subsidy saving of Rs 700 crore.
Under the proposed system, fertiliser allocation to farmers may be determined on the basis of standard NPK ratios. In the case of urea, the entitlement is likely to be fixed at around five to six bags per hectare. Sources indicated that greater clarity will emerge once the framework is finalised. The proposed norms are expected to apply primarily to subsidised fertilisers such as urea and DAP.
Meanwhile, global fertiliser supplies are under severe strain. The ongoing Iran conflict has effectively disrupted movement through the Strait of Hormuz, a key artery for global fertiliser trade. Under normal conditions, nearly 30 per cent of the world’s fertiliser shipments pass through this route.
The fertiliser availability situation remains stable at present, but a prolonged disruption in the Strait of Hormuz could pose risks to supplies during the upcoming Kharif season. As many as eight vessels carrying urea to India are currently stranded in the Strait, raising concerns over timely deliveries.
At the same time, damage to petroleum refineries in Qatar, Kuwait and Saudi Arabia has disrupted sulphur supplies. Morocco-based OCP has also halted DAP exports, as sulphur - an essential input produced by processing rock phosphate - has become scarce. This has significantly tightened global DAP availability.
The West Asia crisis has triggered a sharp rise in global fertiliser prices. Urea prices have surged to nearly $800 per tonne. The situation is particularly challenging for India, which remains heavily dependent on imports to meet its fertiliser requirements.
However, the government has maintained that fertiliser stocks in the country remain adequate at present. As of April 1, urea stocks stood at around 6.2 million tonnes, while DAP inventories were estimated at approximately 2.3 million tonnes. Since the onset of the Iran conflict, India has not imported urea or LNG from Gulf countries, impacting domestic production as natural gas is a key input for nitrogen-based fertilisers.
According to industry sources, urea production declined by nearly 800,000 tonnes in March, and the trend may persist in April. With significant demand expected during the upcoming Kharif season, any delay in imports could lead to supply pressures.
In response, the government is moving ahead with plans to implement a national framework for fertiliser distribution. It has also floated a tender to import 2.5 million tonnes of urea, which is likely to open on Wednesday, after which clarity on pricing and availability is expected to improve.
In view of these developments, the government is fast-tracking the implementation of a National Framework aimed at improving the management and targeted distribution of subsidised fertilisers, with a focus on ensuring optimal use of limited resources.