NPS modification in store for urea sector, not NBS

New Delhi: Decontrolling the urea sector by bringing it under the purview of the Nutrient Based Subsidy (NBS) policy may be a far cry as the government is more inclined to go on with the New Pricing Scheme (NPS) for the often-used fertiliser, reports PTI.
“The thought process of the Department of the Fertiliser appears to be inclined towards a modified NPS-III,” Indian Farmers Fertiliser Cooperative’s (IFFCO) joint managing director Rakesh Kapur said at a conference organised by Fertiliser Association of India.

The fertiliser ministry opined that decontrolling the urea sector by bringing it under the purview of the NBS would not be fair and would not augur well for all firms in the heterogeneous urea industry since the production cost varies from one unit to the other depending upon the plant vintage, feedstock and the level of energy consumption, Mr Kapur said.

The government has already freed potassic and phosphoric fertilisers with the introduction of NBS scheme with effect from April this year. However, it kept under control the price and movement of urea, which constitutes nearly half of India's total fertiliser consumption.

The government had introduced the NPS-III scheme aimed at greater efficiency in urea production and its distribution in the country. The scheme was effective from 1 October 2006 to 31 March 2010. It was later extended on an ad-hoc basis.

Under the modified NPS scheme, the government is likely to fix a price band for urea and allow the domestic industry and importers to sell the fertiliser within the band, which may be anything between 2%-5% more than the current price of Rs5,310 per tonne, official sources had earlier told PTI.

While the industry is in favour of total decontrol of the urea sector, including bringing imports of the fertiliser under Open General Licence (OGL) scheme; continuation of the NPS scheme could be only favoured with some modifications which include a special incentive for per tonne production to the urea units of over 20 years of age.


Unseasonal rain causes havoc for grape farmers

About 30-40% of the grape crop is estimated to have been damaged in grape-growing areas of Maharashtra, compounding the wine industry’s problems

Unseasonal rain showers have damaged crops in many parts of Western India. Much of this loss has been in Maharashtra where onions, soybeans and grapes have suffered seriously. Grape growing areas such as Nashik, Sangli and Baramati have been particularly affected with up to 30-40% of the crop destroyed, according to industry experts.

 "This year too, the post-monsoon, unseasonal rain has caused havoc in the grape-growing regions of Maharashtra. A large part of the crop has been destroyed and the Downey mildew if not controlled will affect the quality of whatever remains," said Subash Arora of the Indian Wine Academy.

Mr Arora feels that growers have little hope of getting better prices for what remains of the crop, to be able to make up for the losses. The prices could be as much as 30-40% from last year, he said.

Rajesh Jadhav, secretary, All India Wine Producers' Association, said that the wine industry has been through a liquidity crunch in the past two years and the unseasonal rain will add to the problem. "About 30-40% of the grape crop has been destroyed. Already, most of the wineries have unsold stock of wine due to lack of demand. Grape farmers are faced with poor demand and now the rain has caused further losses," Mr Jadhav said.

The grape crushing season begins around February every year and the prices of grape wine are also determined at the same time. With only a few wineries buying the grapes, grape farmers will have to settle for lower prices.

"Around 65 of the existing 70 wineries in Maharashtra are owned by small farmers who also grow grapes. Since all of them are already stocked with unused wine, there is very little demand. The other wineries are owned by corporate and have their own grape farms. Even if they buy from small farmers it is on an agreement basis, which doesn't get the farmers much revenue," Mr Jadhav explained.

It is a little early to determine the supply and price of wines in the market. Some information should be available when the crushing season begins.


RBI policies cannot check food item-driven inflation: DIPP

New Delhi: The industry department today said the Reserve Bank of India’s (RBI) fiscal and monetary policies will not be able to check rising prices, as inflation is being driven by a shortage of agricultural commodities, reports PTI.

“... Inflation is driven by food items and it is something which will not respond to fiscal or monetary policies. So we have to certainly reinvent our agriculture,” Department of Industrial Policy and Promotion (DIPP) secretary RP Singh said at a Nikkei Global Eco-Business Forum here.

He said that to meet the food shortage in the country, there was a need to bridge gaps in the food value chain and set up more food processing units.

Overall inflation stood at 8.58% in October, while food inflation stood at 10.15% for the week ended 13th November.

The RBI has also expressed concern over rising inflation and said the prevailing level is above its comfort zone.

Currently, about 60% of India's population is engaged in agricultural activities, but the sector contributes just 18% to the country's GDP, Mr Singh said, adding that “inclusive growth cannot come unless we reinvent agriculture.”

The Indian economy grew by 8.9% in the second quarter of the current fiscal, up from 8.7% in the corresponding period a year ago.

The government today exuded confidence that the GDP growth rate during the current fiscal would exceed 8.75%.

Finance minister Pranab Mukherjee said, “Amid all the depressing news, there is good news... We may be confident that at the end of this year the GDP growth will not be less than 8.7%-8.75%... It may be more.”


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