HVK Archives: Heavy subsidy behind scam
Heavy subsidy behind scam - Finanical Express
Editorial
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3 July 1996
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The cost of the urea scamp is not merely the amount of
money involved, but the future of agriculture itself!
Title : Heavy Subsidy Behind Scam
Author : Editorial
Publication : Finanical Express
Date : July 3, 1996
An aspect of the urea import scandal that has got
eclipsed by the financial magnitude is the over-subsid-
isation and over-use of urea in defiance of the damage
it is causing to the soil. Urea is the most heavily
subsidised fertiliser and this largely explains the
distortion in the balance of nutrients. Nitrogen (80
per cent of it is used as urea), no doubt, is the nutri-
ent in which Indian soil is most deficient. But then,
the soil is poor also in phosphate, potash, zinc and
sulphur, Ironically, the Government in 1992 withdrew
the subsidy on phosphate and potash but retained it
on nitrogen. In an unbalanced pattern of fertiliser
application - excessive use of the cheaper nitrogen and
less than warranted use of the costlier but neces-
sary phosphate and potash - the nutrient reserves of
the soil get depleted. While urea does contribute to
luxurious growth of plants for a time, these plants
inevitably demand greater use of other nutrients which
the farmer, however, does not apply because they are
much too expensive. One unit of phosphate is twice as
costly as urea. All along, nitrogen, potash and phos-
phate were sought to be applied in a balanced manner
consistent with the fact that these three nutrients
worked together. In 1992, the system was broken with
heavy subsidisation of nitrogen.
The over-importance given to urea explains why those who
wanted to defraud the nation chose urea imports for the
purpose. The heavy subsidy meant that import of urea
was a more lucrative proposition than of other nutri-
ents. To seamsters, it did not matter whether the
Indian soil retained its fertility or not. What did
was that they had a goose that lay golden eggs at their
mercy. It would be farfetched to suggest that the 1992
reform measure - or so it was thought - was designed to
facilitate use of urea for an act of fraudulence. The
nutrient balance, surely, was disturbed not with the in-
tention of letting Sambasiva Rao and company to make
substantial gains at the expense of the nation. It was
simply an act of thoughtlessness by a bureaucracy which
as usual cared two hoots for the wisdom that went with
expertise - in this case, that of agronomists.
Nitrogen or urea did initially help raise crop yields
but its contribution later became nil, all the more
because of the depletion of other nutrients in the
soil. The country needed not an excess of urea but a
balanced supply of urea, phosphate and potash. Evi-
dence of the repercussions of over application of the
first is strong enough to warn of the extensive danger
to the soil. When we consider that the designated Turk-
ish exporter did not supply even a tonne of urea,
obviously, the outflow of Rs.133 crore in foreign
exchange was not reflected as it would have been - if
it had been in lieu of the supplies made - in the Indian
soil losing its nutrients further. This is the only
consolation that one can draw from this particular scam.
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