Credit squeeze and lovv purchasing power may force consumers in many countries to return to basic diets with more of grains instead of mea.t, fish fruits and vegetable;,. The economics of biofuels might also be threatened, if crude oil prices continue to fall further.

The current economic situation, especially climate change and financial meltdown, have impacted world agriculture and fertilis.?; demand in several ways. Decline in grain prices have affected the cost benefit ratio of fertiliser use. Farmers do not want to invest in fertilisers until the cost: benefit ratio improves. This will have negative impact on demand for fertilisers. Global fertiliser demand is likely to recover by the year 2009-10.

Fertiliser trade pattern during 2009 will depend on effects of domestic input costs, extent of import substitution and rise in export availability in countries with excess supply.

Domestic fertiliser industry supported by positive interventionist policies of the Government played a iTiicial role in ensuring India's food security. The role of fertilisers has increased today, as further increase in agricultural production has essentially iu come by way of increased I'liuluctiviiy from the available or rather lu inking cultivable land.

I ) Due to unfavourable policies in the Post liberalisation era. the fertiliser  sector has   suffered   badly.   No investment for capacity erenion has .been made in the last decade. As a result,   domestic   capacity   and production of fertilisers have stagnated. On the other hand, demand for fertilisers has been steadily growing. ' This has increased India's dependence . on imports subjecting it to exploitation in the international market, besides increasing the subsidy burden. Last year the Government had to pay significantly higher subsidy per tonne on imported fertilisers than or. domestic fertilizers.

The current situation warrants revisiting whole gamut of fertiliser policies, look back at the events and drivers, consequences, implications and possible and desired responses by key stakeholders in order to ensure a more stable and hunger-free world tomorrow.

The crop removal of nutrients is well above additions- resulting in continuous depletion of soil fertility. The estimated annual gap between removal and addition of nutrients (NPK) is about 8-10 million tonnes.

The imbalanced and inadequate application of fertilisers has serious repercussions for efficacy of the applied fertilisers. The inefficient use of fertilisers is liable to make fertiliser consumption uneconomical, produce adverse effects on environment causing health hazards and global climate change.

Crop response to applied fertilisers and the factor productivity have been on decline under intensive croping systems mainly due to high nutrient turnover in soil plant system coupled with low and imbalance*'! fertiliser use. Increasing deficiency of secondary and micro nutrients (S, Zn, B, Fe, Mn etc) have emerged as a major soil health problem affecting crop Productivity and farmers profitability.

Integrated Plant Nutrition System (IPNS) involving combined use of farmyard manure (FYM), biofertilisers and fertilisers not only helps in improving the productivity of the major cropping systems but also maintains better soil health on cost effective basis.

Analysis of 190 globally important soils in selected countries showed that deficiency of zinc in soils has been a global problem. Already 50% of the cultivated soils were found to have zinc deficiency problem and the extent of Zn deficiency was severe in India, China, Pakistan, India, Turkey and Austrialia.

Zinc deficiency in cereals has resulted in serious malnutrition problem in human being together with vitamin A deficiency. Growth of nearly half of Indian children under the age of five are stunted which is associated with under­nutrition.

Sulphur deficiency has become widespread in most of the agricutural areas of the world, becoming one of the limiting factors for further sustainable increase in agricultrual production and fertiliser use efficiency.

The recent Indian governmental decision to include sulphur fertilisers in the Fertiliser (Conrol) Order and fertiliser subsidy system would help in bringing sulphur into the mainstream of fertiliser production and use.

Growth in worId sulphur consumption will continue despite recent economic turmoil. Strong growth is expected in devleoping world, offsetting weak growth in developed world.

Availability and price of natural gas remains a prime concern in maintaining production from the existing capacity and expansion of capacity through de-bott'lenecking and new projects. Additional natural gas will be available shortly from domestic sources which should take care of shortfall in the existing fertiliser plants. Allocation of quantities would be sufficient to meet the complete demand of the existing fertiliser capacity. Construction of proposed / approved pipelines to connect the remaining fertiliser plants remains uncertain.

There is no firm plan for allocation of natural gas from the future domestic production for additional capacity for fertiliser production. Penalization of projects is difficult in absence of tie up of supply of gas on long term basis.

Revamp / retrofit measures are available for debottlenecking capacity and improvement of energy efficiency jf ammonia and urea plants. A number of units are implementing revamp / retrofit measures to expand capacity and improve energy efficiency These projects are attractive in view of escalating cost of energy. However, high cost of capital equipment remains a cause of concern.

There is great emphasis on improving response of application to plant nutrients Innovative products specific to agro climatic conditions can be offered to the farmers for better crop response, higher productivity and improved viability of Indian agriculture. These products include customized fertilisers. Fortified fertilisers, water soluble fertilisers, etc. Technologies are available to produce a range of customized and value added lertiliser products.

Processes for production of fertilisers involve a number of catalytic reactions. Efficient catalyst do not only ensure high process efficiency but also reduce energy consumption and carbon dioxide emission. Therefore, selection of efficient catalyst suitable for specific process conditions can play an important role in reduction of environmental impact of production facilities.

New Pricing Scheme Stage III has given scope for the industry to improve production efficiency and also for expanding marketing territories. This policy has also enabled the state governments to involve themselves in allocating the entire quantity of planned urea arrivals on district-wise, month-wise and supplier-wise basis. The monitoring of movement and distribution of urea throughout the country up to the district level on an online web based monitoring system has facilitated proper planning as per the requirement.

The Fertiliser Monitoring System (FMS) is a software tool developed by Ministry of Chemica's and Fertilizxrs, Government of India with the objective of monitoring movement of fertilisers at various stages in their value chain, giving information to the state and centrel government, industry and general public through public domain. The website provides information on despatches, receipts and sales of various fertilisers in different states on day to day basis.

Nutrient based pricing policy clearly indicates the commitment of the Government of India to sustain soil health and enhance the productivity. The policy is aimed at promoting balanced use of plant nutrients.

The Concept of customised fertilisers, has brought in to focus the cause of sustaining!.' soil health by developing site and crop specific fertilisers. It is a real challenge for the industry to identify the required grades o f customised fertilisers through exhaustive research work, establishing manufacturing facilities and making them available to the farmers. Support from Government of India and State Government is required for competing with the traditional complex fertilisers.

The objective behind the implementation of the Uniform Freight Policy is to facilitate the farmers across the country to get fertilisers at the right time in adequate quantities at uniform price across the nation, especially, in the areas which are far from the production sites and ports.

Some of the major weaknesses of Indian roadways are (i) Less than 10% of National and 2% of State Highways are 4 lanes, (2) Mixed traffic of fast & slow vehicles on the same road, (iii) Average truck speeds is only 30-40 kmph, (iv) Outdated vehicle fleet and (v) 25% of National Highways and 50% of State Highways are in poor surface condition.

Some of the major weaknesses of Indian railways are (i) Only 25% of network is double or multi track, ^ii) Freight trains run at an average speed of 23 kmph and (iii) Freight tariff is one of the highest in the world and it is used to cross - subsidize passenger fares.

Indian ports both on the east coast as well as on the west coast, primarily do not have the necessary draught to berth large vessels and therefore, Indian maritime industry is grappling more with handy max vessels. Discharge rates are pathetically low, offering, little incentive to both the exporters as well as the importers. Port facilities like rake siding, tipping facilities are totally absent necessitating unnecessary trucking costs.

Fertiliser marketing and movement involve large volume and transactions. Collection, compilation, monitoring and analysis of this information poses a big challenge. ERP solutions available in the market are prohibitively expensive and require major customization. Keeping in view this limitation, one of the large fertiliser companies (IFFCO) undertook the task cf developing the software in-house and implemented the scheme (e-vikas) successfully. This involves use of broadband connectivity to central server and the field officers are now feeding the data directly into the central server using web based software.

Marketing cost has been reduced. eVikas has become the backbone for meeting the requirements of Fertiliser Monitoring System (FMS). The data of Receipt at Rake points, Distribution to warehouses and Sales is extracted from eVikas on daily basis and uploaded in to FMS. Without computerisation, daily uploading of all the data into FMS would have been extremely difficult.

The Government has recently initiated some policy changes for fertiliser sector to respond to the emerging needs of Indian agriculture and to attract fresh investment for expansion of domestic fertiliser capacity. But much more remains to be done to achieve desired results. Radical changes in the fertiliser pricing and subsidy policies are needed to attract investment in domestic fertiliser industry lor,sustainable agriculture.

Ideal scenario would be : the complete deregulation of fertiliser sector, removing all controls and restrictions including the control on MRP. The Government may also devise :1alternative mechanism to disburse subsidy. without involving the industry ionsidered desirable. But. if the Government still decides to route subsidy through the industry, the practical and workable model would be to provide fixed subsidy per tonne of nutrient with open MRR

The Government of India is required to take quick decisions for adjusting policies in response to changed market conditions. It is expected to formulate conducive policies to attract investment in the sector and provide diplomatic snpport for assured supply through joint ventures in resource rich countries and long, term purchase agreement for crucial raw materials/intermediates to ensure fertiliser security for the country.

Domestic fertiliser industry will have to work with Government to overcome cost disadvantages under the existing policies, remove operational bottlenecks and improve efficiency. It will also have to prepare itself for strategic tie-ups and joint ventures in resource rich countries with buy-back arrangements. Similarly, international suppliers of fertilisers and raw materials are required to ensure timely suppl}' to India and strengthening business relations for long-term supply.

Promoting balanced and integrated use of fertilisers with improved fertiliser use efficiency in already fertilised areas and popularisation of adequate nutrient replenishment in areas where fertiliser use is yet to take off as an essential agricultural practice, will go a long way in increasing agricultural production besides bridging yield gaps at regional, state and districts levels.

Precision agriculture is likely to play a greater role in enhancing crop productivity. Site Specific Nutrient Management (SSNM) has to be coupled with other input needs of the crop to improve soil halth and fertiliser use efficiency.

Since integrated plant nutrient management system holds the key to soil health, more efficient technolgical innovations are needed for biofertilisers, crop residue management, composting etc. New sources of fertilisers have to be identified or generated to meet the additional demand.

The important measures needed for improving nutrient use efficiency are: Soil test based fertiliser use; appropriate source, time & method of application; and balanced & integrated use of fertilisers. There is an urgent need to ensure reliable soil testing facilities across the country.

Enrichment of widely applied fertilisers with Zn and tneir nationwide application would be an excellent investment for crop production in India. There is an urgent need for adoption of a new fertiliser policy to encourage production and application of Zn-enriched fertilisers in India. Government may consider paying premium to farmers for Zn-biofortfied grains.

The increasing demand for S fertilisers and their use in agriculture provides signficiant market opportunities of sulphur (over 10 million tonnes S) to fertiliser manufacturers. Fertiliser producers need to explore this new market potential quickly to maximise profit by promoting S fertiliser production, marketing and use.

Availability and price of natural gas remains a prime concern in maintaining production from the existing capacity and expansion of capacity through de-bottlenecking and new projects. It should be ensured that natural gas is available to existing fertiliser plants under gas utilisation policy as soon as possible. Allocation of quantities should be sufficient to meet the complete demand of the existing fertiliser capacity. Construction of proposed / approved pipelines to connect the remaining fertiliser plants should be expedited.

A firm plan for allocation of natural gas from the future domestic production for additional capacity for fertiliser production should be laid so that plans for expansion and new projects can be finalized.

Processes for production of fertilisers involve a number of catalytic reactions. Efficient catalyst do not only ensure high process efficiency but can also reduce energy consumption and carbon dioxide emission. Criterion for selection of catalyst should incorporate the parameter of environmental impact of the production process.

In Fertiliser Monitoring System (FMS), practical aspects related to time frame for uploading of data, provision for modifying the plan based on the exigencies, de-link from subsidy payments are to be looked into for positive changes.

Some of the issues in the Uniform Freight Policy viz. existing fright rates. Working of distances from railhead to block and reimbursement of direct movement from plant/port need immediate attention.

Though the Uniform Freight Policy states that the freight is reimbursed to the industry up to the block level on actual, in reality it is only primary rail freight that is paid on actual. Even the freight from rail to block level is paid on normative basis i.e. on district average leads. The freight from block to dealer point is not being paid which should be paid.

Bringing Single Super Phosphate (SSP) at par with other P&K fertilisefs for calculation of subsidy and for declaring uniform MRP throughout the country is a welcome step by the Government of India. The SSP industry was also happy to note the application of uniform freight policy for SSP with effect from October 1, 2008. However updation of conversion and other costs, finalising realistic average leads, average transportation costs (Rs/Mt/ Km) etc. need to be addressed, for enabling the SSP industry to make the product available to the farmer.

Share of waterway transport in India is a mere 9% as against 32% in 'he EU. Diversion of domestic cargos from land modes to coastal and inland waterways can result in solving problems of congestion in addition ic bringing huge cost effectiveness in transportation sector.

Inadequate investments in technology have resulted in inefficient operations and high cost of services. Handling costs at major ports have shown tendencies of steep increase, seriously affecting the competitiveness of Indian Exports. Over the last five years, the per tonne handling costs at Indian ports have increased by 15% to 1 12 % at the major ports. The JNPT is the only exception where the costs have reduced h\ 41r/.

Connectivity of Indian ports to hinterlands remains a major challenge to Indian ports. Double line connectivity to all major ports is recommended. Some initiative has already been taken in this direction. Eight double lining projects are sanctioned / ongoing and five new projects have been put on fast track. Faster action and close coordination between two ministries of railways and surface transport is required.

Diversion of domestic cargos from land modes to coastal and inland waterways can result in solving problems of congestion in addition to bringing huge cost-effectiveness in transportation sector.

The problem of huge under recovery in final concession rates due to sharp decline in the prices of finished and raw materials needs to be addressed.

Promoting the use of water soluble fertilisers was strongly recommended by the Fertiliser Advisory Forum net only for agricultural growth but also for the efficient and balanced use of fertilisers. Rationalization of import duty, Popularising water solubie fertilisers usage in combination with Micro Irrigation through extension services and encouraging indigenous production for reducing its cost are some of the issues to be looked in to.

Keeping in view the need for real time information regarding fertiliser production, movement and stocks, etc.. fertiliser companies need to develop seamlessly integrated web based, in-house information system which is comprehensive and economical to ensure optimal utilisation of resources, better manageability and improved control of the system