Govt’s proposal to sell urea under ‘Bharat Urea brand’ across India may take time
The Centre’s proposal to sell urea, for which the government pays around 90% of the cost, under one brand across the country may take longer than expected because various concerns arose during a three-day brainstorming session with stakeholders organized by the Fertiliser Ministry.
Last month, the ministry issued a concept note to establish ‘One Nation, One Fertilizer’ by inviting enterprises to sell under the Bharat Urea brand. Also Read | Russia suspends fertilizer exports and warns ‘negative consequences.
Experts pointed out in the Chintan Shivir, which concluded on Sunday, that such a step must be legally inspected as to what provision the government can direct companies to use one brand name, even though companies were ready to accept the decision, according to highly placed sources who were part of the deliberation told.
Furthermore, experts questioned how the government would handle the negative effect on the brand if there were low-quality nutrients.
Cabinet approval is required
It was also stated that such a move would require Cabinet approval and that it might not be possible to apply it from the upcoming kharif season because companies would need time to print it on the bags ahead of time. The kharif season begins in June, with the arrival of the monsoon, and farmers purchase urea in advance.
‘The subsidies for new urea production facilities have been estimated on the delivered gas cost price, with a guaranteed return of 12% post-tax return on equity for 8 years from the date of commercial production under the New Investment Policy-2012 and its amendment,’ an official explained.
He went on to say that the necessity for a single brand was felt because the government noted that when enterprises receive freight subsidies from the government, they don’t hesitate to carry fertilizers over longer distances.
He also mentioned that brand-specific demand for fertilizers in specific places by farmers is one of the causes for the criss-cross movement. For example, Rajasthan-based enterprises are sold in Uttar Pradesh, whereas Uttar Pradesh-based plants are sold in Rajasthan.