The fertilizers industry plays a vital role in enhancing agricultural productivity in India. However, the black marketing of fertilizers has emerged as a significant challenge, hampering the growth of the industry and negatively impacting farmers across the country. Black marketing of fertilizers refers to the illegal and unauthorized sale of fertilizers in the market, often through unethical practices such as hoarding, smuggling, or diversion of subsidized fertilizers meant for farmers. The issue of fertilizer black marketing, which has been growing in India, has been worse in recent times due to various factors such as increased global fertilizer prices, supply disruptions caused by the pandemic, increased farmer demand, scarcity of fertilizer, and the disparity between subsidized and open market fertilizer prices. According to reports, the Central Department of Fertilizers has implemented several strategies to prevent fertilizer diversion and black selling across the nation, but the steps taken thus far are insufficient to manage the problem successfully. Fertilizer Flying Squads (FFS) undertake 370 surprise inspections; 30 FIRs filed for diversion of urea; 70,000 bags seized of spurious urea; 112 mixture manufacturers deauthorized 11 persons jailed under Prevention of Black Marketing and Maintenance of Supplies (PBM) Act. Another ongoing issue was the smuggling of urea across international borders. The neighbouring countries were receiving significant amounts of urea that were being smuggled in.
Impact on the Fertilizer Industry:
The fertiliser business in India has suffered greatly as a result of the illicit marketing of fertilisers. The planned distribution system is upset when subsidized fertilizers are diverted, which leaves legitimate farmers with insufficient supplies of fertilizer. Because of this, farmers are frequently forced to pay outrageous amounts for fertilizers on the illicit market, adding to their already heavy financial load. Black marketing also hurts the fertilizer business. For genuine producers and sellers, the illicit trade lowers overall sales of approved fertilizers, resulting in financial losses. Furthermore, the rising demand for fertilizers on the black market promotes the manufacture of phony or inferior goods, endangering the yield and health of crops.
Impact on Farmers:
Farmers are immediately impacted by the illegal sale of fertilizers because they significantly depend on these vital inputs to increase crop output. Urea is one of the important input for farmers but it is mostly black marketed. The main cause of the urea black marketing is the subsidized sale of a 45 kg bag of urea to farmers for use in agriculture for just Rs 266. The bag normally costs over Rs 2,500. Farmers who aren’t eligible for urea subsidies are forced to buy it from the market at significantly higher prices. In addition to agriculture, urea finds application in numerous other industries, such as industrial mining explosives, plywood, UF resin/glue, crockery, molding powder, animal feed, and dairy products.
Government Initiatives and Actions Taken:
The Indian government has taken a number of actions to address black marketing since it realizes the serious effects it has on the agriculture industry. To guarantee the transparent distribution of fertilizers, the government has put in place stringent monitoring procedures, such as the installation of online tracking systems. To some extent, this has assisted in reducing leaks and black marketing. Furthermore, The State Governments are authorized to take appropriate measures to prevent fertilizer diversion and to prosecute those who disobey these directives. The Department of Fertilizers has occasionally written to the Ministry of Home Affairs and the Chief Secretaries of several States requesting that they direct the enforcement agencies under their purview to take the necessary measures to stop diversion.
Distribution within the States is the responsibility of the relevant State Governments, however the Department of Fertilizers guarantees the supply of all fertilizers at the State level in accordance with the requirements estimated by DAC&FW in cooperation with States/UTs for each season. There is never a scarcity of fertilizer because its supply is constantly checked at different levels.
Conclusion:
Indian agriculture as well as fertilizer industry are under threat due to illegal fertilizer trade. It disrupts the business chain, reduces agricultural yields and makes it difficult for legitimate farmers to obtain fertilizer. Although the government has been successful in solving the problem, greater awareness, tighter regulations and better control are needed to effectively stop the black market. Fair and transparent access to chemical fertilizers is essential to help agriculture and the fertilizer industry.
