Page last updated at 17:27 GMT, Thursday, 26 June 2008 18:27 UK

Fertiliser shortage hits India's farms

By Shilpa Kannan
BBC India Business Report

As the rains have arrived early in Northern India, the countryside has got a much needed respite from the scorching summer heat.

Paddy farmer Ram Nivas Sehrawat
If I had used a fertiliser the plants would have grown much taller by now
Paddy farmer Ram Nivas Sehrawat

Usually heavy rains at this time spells good news for the rice farmers of Haryana, Punjab and Delhi as it is time to start planting in their fields.

But paddy farmer Ram Nivas Sehrawat, who works hard to grow rice crop out of his small plot of five acres just outside Delhi, is a worried man.

Mr Sehrawat has sowed his seeds and his paddy nursery is ready to be transplanted to his main fields.

But he has not been able to apply the vital dose of fertilisers at the right time and his paddy nursery is not looking healthy.

No fertiliser

Now as time is running out to plant them, he is upset.

Crops have failed to grow large because of a lack of fertiliser

"Look at my crops," he says. "They are so small."

This time of year it is essential for farmers to add diammonium phosphate (DAP) to their crops, but Mr Sehrawat has not been able to get hold of any.

"If I had used a fertiliser the plants would have grown much taller by now," he says.

"I have been slaving in my nursery day and night pulling weeds out by my hand.

"With a fertiliser my crops would have been healthy enough to stave off weed infestation. You can't really expect a big harvest without any fertiliser. My production will be down by at least 50%."

He is not alone.

It is the crucial Kharif, or the monsoon crop, across northern India.

In a small shop on the town's main street, most of the local farmers gather to find out when the fertiliser supply will be back.

The shopkeeper does not have an answer and yet again the farmers are sent away empty handed.

Rising subsidy bill

At a small factory in the outskirts of Delhi, workers pack bags of fertilizer to be sent out to the shops.

Fertiliser being bagged
Fertiliser supply is not keeping up with demand

The owner says the supply is tight because while the demand has gone up considerably this year, production has not followed pace.

India consumes millions of tonnes of fertiliser each year.

Production costs have risen on the back of soaring crude oil prices.

Globally fertiliser rates have tripled in the last year.

Prices of the three main fertilisers, nitrogen, potash and phosphate, have gone up by almost 300%.

Diammonium phosphate costs nearly $1,300 (650) per tonne whereas farmers in India pay around $250.

The Indian government subsidises the price by nearly 85% for farmers, which in turn means India's subsidy bill is getting bigger each year.

At the current forecasts it amounts to almost 2.5% of the country's gross domestic product.

Raising production

JS Sarma, secretary to the Indian government's fertilisers department, says he is worried about the global price rise, but the focus for him is to increase production.

Farmers outside shop
Shopkeepers can do little to help the farmers

The government wants to attract investment in additional domestic fertiliser capacity.

"We want to expand our existing capacities," he says.

"We also plan to reopen some of our closed units - in fact eight are closed currently. All of them will reopen immediately.

"We'll prioritise using the gas resources available in the country to produce more fertilisers."

Angry farmers

But increasingly many countries across the world are beginning to recognise that expensive fertilisers, or even a supply shortage, is not just the a problem for the farmers.

Paddy farmers
Farmers say people might starve unless fertilisers arrive

It has a direct effect on the cost and availability of food. Across the world countries are looking at farmers to produce a bumper crop this year to overcome global food shortage. As fertiliser prices go up food prices go up as well, threatening to force millions of poor people into starvation.

Back on the farms, Mr Sehrawat is still waiting for his supply.

"It is really urgent that we get our supplies," he says.

"You can wait for monsoons - that's not under anyone's control - but you can't be made to wait for fertilisers.

"At this rate, people have to keep waiting for rice on their plates. Nothing is going to grow on our fields."

With general elections next year, the government in India could suffer the political consequences of poor agriculture output.

And the anger of unhappy farmers who cannot reap the benefits of a good monsoon.

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