INAUGURAL   ADDRESS
 

Ram Vilas  Paswan

Union Minister for Chemicals, Fertilizers and  Steel
Government of India,  New Delhi

  Mr.   Grover,    Chairman,      FAI,   Mr.  Grewal,   Vice  Chairman, FAI,  Mr. Saha, DG,  FAI, Distinguished Delegates, Ladies and Gentlemen.

I am glad to be present here today on the occasion of the FAI Annual  Seminar 2005 on, “Economic Growth through Agriculture and Fertilisers”, and convey my thanks to all of you. I was told that before my arrival here, Dr. Swaminathanji delivered a lecture and there will be a lot of discussion on this topic during the next two days. Many foreign delegates are present here. However, I shall speak in Hindi and have already circulated my speech in  English also.

Friends, you are all aware that our country is essentially an agrarian country. Howsoever wealthy a person or nation may be, one can not eat gold or silver but has to eat foodgrains for survival. Increase in productivity is essential for agriculture and fertiliser is the key input to increase the agricultural productivity. Thus, agriculture and fertilisers are interdependent. So far India is concerned, it is a developing country and is marching towards to become a developed one. Our aim is to progress on all fronts. Our target is very optimistic. The consumption of fertilisers in terms of nutrients increased from 6.06 million tonnes in 1981-82 to 18.4 million tonnes during 2004-05. The corresponding increase in foodgrains production was from 133.3 million tonnes to 225 million tonnes during the same period. In other words, during the 25 years period, the increase was about 1.75 times. There has been a record increase in production and consumption of urea. The production of urea was 21.6 million tonnes and consumption was 21.66 million tonnes during the last year (2004-05).

Our country has a total geographical area of approximately 328.67 million hectares of which 183.53 million hectares is cultivable land. Against this, only 75.14 million hectares is irrigated. The fertiliser consumption will increase substantially if the entire cultivated land is brought under irrigation. The present level of the per hectare consumption of fertilisers in our country is still low compared to other countries. The per hectare consumption of fertilisers in our neighbouring country China is about 270 kg, as against less than 100 kg in India. Besides increase in demand of fertilisers, it is essential to motivate farmers to increase per hectare consumption of fertilisers. Our fertiliser plants which are lying closed need to be revived to increase the production.

 I am in agreement with Grover Sahib who has just now mentioned about the necessity of revival of closed fertiliser units. We will have to provide fertiliser and seed at subsidised rates to make our farmers prosperous. Government provides subsidy, however, there is a need to review the method of disbursement of subsidy and government assistance. We have constituted Abhijit Sen Committee for it and its report has come which would be examined seriously.

The Sindri, Barauni, Gorakhpur plants of FCI have closed and Haldia plant did not even start the production. There is only one argument for all these units that they were not economically viable. There is no fault of these companies or employees because these units were commissioned as Naphtha based. Unfortunately, the Naphtha prices shot up and gas became cheaper compared to Naphtha. Today, we make the agreements on the basis of gas. However, there was no concept of gas when these units were commissioned. The concept was that of Naphtha based industry at that time. Despite having operated at more than 100% production capacity, all these units incurred losses as the comparison was made with gas based units  and it led to closure of these units. We want to revive these units by two ways. Firstly, our negotiations are going on in abroad for the gas and we would revive the units when the gas is made available. Secondly, our private sector people who are interested to revive/revamp these plants should approach the Government. We would welcome them because we want to increase our foodgrain production along with increase in fertiliser production.

Regarding fertiliser pricing, you all know that Retention Price Scheme (RPS) was in place wherein retention price was unit wise. Later on, it was converted to New Pricing Scheme (NPS), under NPS there has been a complaint that some units gained profits whereas some units incurred losses. The NPS was being implemented in three phases. It was proposed that the policy of urea beyond NPS phase II, which is ending on March 31, 2006, will be reviewed before phase II. A working group under the Chairmanship of Dr. Y. K. Alagh has been constituted and I am informed that the report of  the committee is expected soon.

The industry should not have any doubt over the report of this working group. Our  ministry  and department are of the view that no unit, whether in private or public sector, will close and both the private and public sector need encouragement to  increase the domestic production. We are also setting up new units.  Indo-Oman Project has been commissioned and likewise there is  a  plan for expansion of Hazira plant. Many private companies are sometimes  coming in and sometimes out of production. Recently, Duncan’s Kanpur plant started production but was closed thereafter. We are finding the reasons. Thus, our main objective is to ensure the growth of companies, in both the private and public sectors.

The report of Dr. Y. K. Alagh committee is expected shortly and many apprehensions are expressed about the report of this committee. Our public sector people are approaching us but I want to assure you that Fertiliser Industry will be consulted before taking a final decision in this matter and that decision will be in the interest of the Industry, farmers and the country. Abhijit Sen committee has been constituted to  address the issues of phosphatic fertilisers. The committee has submitted its report and a final decision on the same will be taken soon.

At the occasion of Golden Jubilee of IPL, I had mentioned that the country would become self-sufficient as far as urea was concerned. Regarding urea prices, Groverji has informed that the price of urea in international market was higher than the average cost of production in the country. However, we are dependent on imports for DAP and MOP. We also import phosphoric acid, rock phosphate and other raw materials. We require lakhs of tonnes of material every year and this requirement will continue in future. Therefore, I had earlier mentioned at the Golden Jubilee of IPL to set up Joint Ventures overseas.  For coking coal too, I had suggested to set up Joint Ventures overseas with long-term agreement. We live in an environment of uncertainty by making negotiations every year. We should therefore look for a permanent solution either through Joint Venture or any other technical development.

I would like to draw your attention to the issue of availability of fertilisers. On visiting a village even now, you will find that there has been shortage of urea, DAP  and  MOP. While reviewing the state requirement, we find that 125 tonnes fertilisers has been dispatched against the requirement of 100 tonnes. However, there is difference between the Act and the Fact. Our record shows that the fertiliser has been supplied as per requirement of the state. However, there is complaint that the fertiliser is not available and it is sold in black. I understand that  our distribution system is mainly responsible and it needs to be streamlined. This is true that the fertiliser demand comes through Ministry of  Agriculture but we have to ensure whether   the  fertiliser is available at a place where it is needed. Public sector company should not be satisfied with the fertiliser demand and its dispatch  but  should find out whether fertiliser  is reaching at each and every sale point. The shortage of even one kg of fertiliser means loss to the country and therefore  we  need to make our distribution system more effective.

The matter of certification of bills is being reconsidered and we are reaching for a new methodology. The most victim state has been Bihar in this regard. The certification process starts from lower level (district) where there may be some other problems. However, companies claim of not receiving hundred of crores of Rupees on account of certification. Therefore, we have decided to have a revised framework in this direction. Is certification very necessary and if necessary, at what level? Should there be any new methodology to verify whether the fertiliser has reached to a particular destination? There may be many other ways also. I understand that the   senior officers of department sitting here   should discuss the matter, so that   neither the companies incur loss nor the farmers suffer. We try our level best and feel satisfied. However, during the questions in Parliament we get the news from one corner or the other that there has been some lacuna in it.

From the very beginning I am of the opinion that SSP serves as DAP for poor farmers and its price is relatively very low. On the initiative of my department, the Govt. has increased the adhoc subsidy on SSP from Rs 650 to Rs 975 per tonne. We were of other view that the payment of subsidy on SSP should be made on the pattern of DAP and other fertilisers. However, the decision has been taken by the experts after a serious thought. You are aware that our country has a production capacity of 60 lakh tonnes of SSP annually. Unfortunately, the present production is merely 25 lakh tonnes. The SSP production has increased by 60,000 tonnes with the new pricing and the SSP companies have promised to produce even more.

As mentioned by Grover sahib, Dr Swaminathan   in his speech told that the requirement of all plant nutrients cannot be met by   the use of urea, DAP, MOP and fertiliser mixtures. Like human body, plant also requires each type of nutrient. SSP will provide sulphur but besides  sulphur, plant needs zinc, boron and other essential nutrients. For these, we need to develop some technology like biofertilisers. Emphasis is needed on compost fertiliser which has been in use since our childhood.

We are in government and want to assure you that we would take the interest of both, i.e. consumer (farmer) and the industry. We would like to urge upon our public sector people that it is an era of competition and we are living in the environment of day-to-day new competitions. Our employees have become conscious   and  there is change in their  mentality. We should not forget that there is a difference between the nurse and the mother. The love which is provided to child by mother can not be  provided by educated nurse.  Industry needs affection and workers also  need affection. When any plant is on the verge of closer,  a worker starts thinking that the plant is closing and its production starts reducing. When he feels that our plant will not close, its production starts increasing. Because, the relationship between the management  and labour plays an important role. We are not experts and are connected  with public. People who are connected with public are broad hearted and you are broad minded. But for a revolution, the mind and heart should work together. The people, who are attending this Seminar, are all knowledgeable and we wish that the deliberations during the two days would be quite useful to FAI, Fertiliser Industry, Government of India and the country.

There is no difference of opinion that the fertiliser security is the national security. We are self-sufficient in fertilisers. We are fighting war in other matters of  the country. But the country which is worried about the availability of food for its people can never be successful on other fronts. We are happy that our country is self-sufficient in foodgrain productivity. But would have to develop and strengthen fertiliser industry and improve the production capacity. We are marching with this hope.

Jai Hind!