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The Bitter Medicine

Implementation of policy to supply only neem-coated urea to Indian farmers will have far-reaching effects

Photo Credit : Bivash Banerjee


Critics of the Narendra Modi regime, and there are legions of vociferous ones despite the tall talk in intolerance, have a favourite theme when a policy starts delivering positive outcomes. They insist that the regime is merely imitating schemes and policies launched during the UPA regime.

In a way they are right. For example, Aadhar is an initiative by the UPA government. Despite legitimate concerns over security and privacy, the Aadhar card has worked magic for millions of Indian poor. Then again, Jan Dhan Yojana traces its roots to the UPA. But it is under the Modi regime that the financial inclusion scheme has well and truly taken off.

Subsidised LPG connections for the poor is yet another UPA era policy that the present regime has accelerated to directly benefit close to 20 million poor women. In fact, the free LPG or Ujwala scheme is credited with the recent electoral victories of the BJP in crucial states like Uttar Pradesh.

While Aadhar, Jan Dhan and free LPG have grabbed media attention and headlines, one more UPA era policy is quietly promising to transform Indian agriculture even as it plugs leakages and corruption. In the financial year just gone by, the Ministry of Agriculture claims that total food grains output will be more than 271 million tonnes, up from about 251 million tonnes.

In addition, early estimates reveal that horticulture output, which has been outstripping food grains output in recent years, will cross 300 million tonnes. That’s good news. The shocking news is that such record levels of production have been achieved even though consumption of the primary fertiliser urea has actually declined by almost 2 million tonnes. Never in recent history has production of food grain increased when consumption of urea has fallen.

The answer lies in a simple technological solution called neem coating of urea. The day the Modi government completed one year in office on 25 May 2015, it announced a policy that made it mandatory for all fertiliser companies in India and all importers of urea to henceforth supply only neem-coated urea. In the din and bustle of politics and other “headline” savvy events, this significant move was largely ignored except in centres pursuing agriculture research. But the impact has been tremendous.

K.B. Ramappa, associate professor at the Bengaluru-based Agricultural Development and Rural Transformation Centre at the Institute for Social and Economic Change, conducted a research study to assess the impact of neem-coated urea. The mystery of rising output along with declining urea use was quickly solved. The study also revealed that neem-coated urea increases yield of paddy by 5.79 per cent; sugarcane by 17.5 per cent; maize by 7.14 per cent; soybean by 7.14 per cent; and tur/red gram by 16.88 per cent.

The study also confirmed that the use of urea came down from 152 kg per hectare crop in 2014-15 to 149 kg in 2015-16, but the yield jumped from 2,028 kg per hectare in 2014-15 to 2,042 kg in 2015-16.

Cutting down on jargon, there are three reasons why neem-coated urea has had such a significant impact. First, it releases nitrogen slowly, enabling farmers to curtail consumption. Second, it helps plants fight pests in a more effective manner. And third, it has actually improved the soil quality wherever it has been widely used. This is particularly significant since excessive use of fertiliser in recent decades has led to large scale deterioration in soil quality. There is also the added benefit of curbing corruption and wastage.

Prior to neem coating, there was large scale diversion of urea to the plywood and textile industries, leaving genuine users in the lurch. Protests and riots over fertiliser shortages were routine during the UPA regime.

But since neem-coated urea cannot be used for any other purpose, a massive leakage in subsidies has been effectively stopped. It has been estimated that annual savings due to this range from Rs 7,500 crore to Rs 10,000 crore. Indeed, the level of fertiliser subsidy has actually come down in recent times.

State Minister of Chemicals and Fertilizers, Mansukh Mandaviya, explained recently in Parliament how his government took the UPA idea forward.

In his own words, “On 2 June 2008, the government had notified the policy for encouraging production and availability of fortified and coated fertilizers in the country wherein the indigenous manufacturers/producers of the subsidised fertilisers were allowed to produce fortified/coated subsidised fertilisers up to a maximum of 20 per cent of their total production of respective subsidised fertilisers. This ceiling of production of neem-coated urea (NCU) was increased from the limit of 20 per cent to a maximum of 35 per cent of their total production vide notification dated 11 January, 2011.”

As we all know, no further step was taken till the Modi regime took over and took less than a year to make neem-coated urea mandatory.

There is more in the pipeline. Beginning June, fertiliser subsidies will be paid to companies only on actual sales and not on production and despatch figures. And yes, the Aadhar card and the Jan Dhan accounts will come in handy.

Sometimes, seemingly small steps do lead to big changes.

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agriculture narendra modi Magazine 15 April 2017 economy

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