Reforming the Fertilizer Sector

How have the fertilizer prices changes over the years?

• According to 1991-92 Economic Survey, the fertilizer prices remained unchanged between July 1981 and July 1991.
• In July 1991, the Union Budget increased the fertilizer issue prices by 40%. In August 1991, it was reduced to 30%.
• Small and marginal farmers were exempted from this price increase.
• A year later, the price increase for urea was rolled back to 17% over the pre-reform price due to opposition to the increase in prices.

How has the government been subsidizing fertilizers?

• The Economic Survey noted the substantial subsidization of fertilizers despite the 30% increase in issue price in 1991. It called for a reduction in subsidy.
• Over the past decades, there has been an uncontrolled rise in urea subsidization.