Why in the News?

• Prime Minister of India has recently inaugurated 'Urea Gold,' a novel fertilizer created by the state-owned Rashtriya Chemicals and Fertilizers Ltd (RCF), which involves enhancing urea with sulfur.
• Urea, a white nitrogen-based chemical fertilizer, artificially enriches plants with a key nutrient, nitrogen.

What are Fertilizers?

• A fertilizer is a substance, whether naturally occurring or synthetically produced, comprising essential chemical elements like Nitrogen (N), Phosphorus (P), and Potassium (K), which enhance the growth and productivity of plants.
• In India, the primary fertilizers are Urea, DAP, and Muriate of Potash (MOP), forming the trio of fundamental fertilizing agents.

Fertilizer Utilization in India:

• The Green Revolution in the 1960s experienced remarkable success due to the abundant application of these fertilizers, resulting in increased grain output.
• However, the response of crop yields to fertilizer usage has significantly declined over time.
• For instance, during the 1960s in India, 1 kg of NPK nutrients yielded 12.1 kg of cereal grains; this yield diminished to 5 kg during the 2010s.
• The primary cause behind this decline has been the imbalanced application of Nitrogen (N) by farmers.

What Factors Sustain Urea's Prominence as the Leading Fertilizer?

• Advantages in Abundance:
• Urea retains its supremacy as the most extensively utilized fertilizer owing to its enriched nitrogen content, a pivotal nutrient for promoting plant growth.
• Urea's widespread popularity is attributed to its accessibility and cost-effectiveness, presenting farmers with a practical nitrogen source.
• Additionally, its ease of storage and transportation enhances its convenience for both agricultural practitioners and manufacturers.
• The versatility of urea as a fertilizer is noteworthy, as it suits a diverse array of crops and soil compositions.
• Substantial Subsidization:
• In India, urea maintains its position as the top-ranking fertilizer in terms of production, import, consumption, and regulatory control.
• Urea's consumption has surged by more than a third since 2009-10, primarily due to a mere 16.5% increase in its maximum retail price (MRP), rising from Rs 4,830 to Rs 5,628 per tonne.
• Nonetheless, the current per-tonne MRP of urea, especially when juxtaposed against DAP (Rs 27,000) and MOP (Rs 34,000), significantly deviates from the recommended 4:2:1 NPK usage ratio, widely considered optimal for Indian soil conditions."

Dual Challenges Arising from Escalating Urea Consumption:

• India's annual urea consumption, reaching around 36 million metric tons, currently ranks second only to China's 51 million metric tons. China's urea production is primarily coal-derived.
• In the previous fiscal year, approximately 7.6 million metric tons of urea were imported out of the total 36 million metric tons consumed. Notably, even domestically produced urea relies on imported natural gas as its primary feedstock.
• The second challenge centers on nitrogen use efficiency (NUE). A mere 35% of the nitrogen applied through urea in India effectively contributes to crop growth and harvested yields.
• The diminishing NUE, declining from approximately 48% in the early 1960s, compels farmers to increase fertilizer application to attain the same level of yield.

Government Initiatives to Curtail Urea Consumption in India:

• The initiation of the nutrient-based subsidy (NBS) framework in 2010 marked a pivotal step.
• Under NBS, the government established a fixed per-kilogram subsidy for each fertilizer nutrient – Nitrogen (N), Phosphorus (P), Potash (K), and Sulphur (S) – a departure from the previous product-specific subsidy system.
• The primary goal is to encourage balanced fertilization by dissuading excessive application of urea (46% N), di-ammonium phosphate (DAP - 46% P plus 18% N), and muriate of potash (MOP - 60% K).
• In 2015, the government mandated the application of neem oil coating to all domestically produced and imported urea.
• While initial years witnessed a decline in consumption, this trend reversed from 2018-19.
• Subsequently, the transition from 50 kg bags to 45 kg bags occurred in 2018. Moreover, the Indian Farmers' Fertiliser Cooperative (IFFCO) introduced the liquid 'Nano Urea' in 2021. This innovative form of urea as nanoparticles aims to rectify the disproportionate and unsystematic usage of conventional urea. It seeks to elevate crop productivity while diminishing soil, water, and air pollution.
• Despite these government measures to counter illegal diversion for non-agricultural purposes and enhance nitrogen use efficiency, the reduction in urea consumption has not been achieved."

What is Urea Gold?

• Ordinary urea typically contains a single plant nutrient, Nitrogen (N), at a concentration of 46%. Urea Gold, on the other hand, consists of 37% N along with an additional 17% sulfur (S).
• Urea Gold pursues dual objectives.
• Firstly, it provides Sulphur (S) in conjunction with Nitrogen (N).
• Indian soils suffer from Sulphur deficiency, a shortfall that is particularly crucial for oilseeds and pulses – commodities in which the nation is heavily reliant on imports.
• Secondly, Urea Gold aims to enhance the Nitrogen Use Efficiency (NUE) of urea.
• The sulfur coating on urea ensures a more gradual release of Nitrogen, prolonging its action.
• This extended effect keeps plants vibrant for an extended duration, thus reducing the frequency of application. For instance, just two bags of Urea Gold (instead of three) could potentially cover an acre of paddy or wheat.
• As of now, the commercial launch of Urea Gold by RCF is pending, with pricing details yet to be disclosed.

Primary Obstacle in Urea Fortification and the Path Forward:

• A key challenge pertains to pricing dynamics.
• For instance, the anticipated Maximum Retail Price (MRP) for Urea Gold is projected to range between Rs 400-500 for a 40-kg bag (compared to approximately Rs 254 for a 45-kg bag of regular neem-coated urea).
• One potential solution could involve allowing market-driven determination of MRPs for all coated fertilizers.
• Given that conventional urea and DAP will persist at heavily subsidized rates, manufacturers are likely to face constraints in levying substantial premiums on their fortified fertilizer offerings.
• An optimal approach would involve conducting the coating process directly at the manufacturing facility.
• This ensures a more consistent distribution of micronutrients and simplifies the task for farmers, sparing them the intricacies of blending the elements themselves.

Mains Question:

• Discuss the outcomes of CACP's proposal to incorporate Urea into Nutrient-Based Subsidy. Analyze how Urea's exclusion from NBS contributes to nutrient imbalance and assess how challenges, including economic burden and black marketing, impact the effectiveness of NBS. (15M)