KATHMANDU, May 25: Farmers are likely to face shortage of chemical fertilizers as the government´s indecisiveness in blacklisting Indian Potash Ltd (IPL) has stalled the process of importing di-ammonium phosphate (DAP).
The government had assigned IPL to supply fertilizers but it was found supplying them in lesser quantities. IPL was assigned by the Indian government last year to supply a total of 40,000 tons of DAP to Nepal.
However, the Public Accounts Committee (PAC) of parliament on March 16 directed the government to blacklist the Indian firm and source DAP from another party. The DAP supplied by IPL fell short by 2 to 10 kgs per 50 kg sack.
But the government has neither blacklisted the IPL, nor has it taken any initiative to purchase the much-needed DAP even as the new paddy season begins in another three weeks.
Under the initial consignments, which was delivered as per the arrangement between Nepal and India, IPL had supplied only 10,000 tons of DAP of the agreed 40,000 tons. Likewise, Minerals and Mine Trading Company (MMTC) of India -- the other party assigned to supply Nepal 60,000 tons of urea -- has so far delivered only 12,500 tons of urea.
Though officials are optimistic about receiving assigned quota of urea from MMTC, they expressed doubts over receiving the remaining 30,000 tons of DAP from IPL.
“Farmers are certain to face an acute scarcity of DAP in the paddy season as we have a meager stock of 12,400 tons of fertilizers, whereas the demand for the season is estimated to run over 100,000 tons,” Shasi Raj Tuladhar, acting Managing Director of Agriculture Inputs Company (AIC) told Republica.
AIC had knocked the door of the Ministry of Agriculture Development (MoAD), after the PAC decision seeking the latter´s clear suggestions on the matter in April. "PAC´s instruction further confused us about the legality of continuing the purchase. Hence, we had also sought MoAD´s guidance on how to proceed ahead for acquiring the remaining quota of DAP that India has promised to supply at cheaper rates," said Tuladhar.
However, the ministry has not taken any decision as of yet. “We have not taken any decision in this regard this year. The matter is still under discussion,” said Nathu Prasad Chaudhari, secretary at MoAD. He refused to divulge the details behind not blacklisting IPL, neither did he disclose any initiative by the Ministry for acquiring the remaining DAP from other firm.
Contrary to the indecisiveness of MoAD, a source at the Ministry of Foreign Affairs informed Republica that the Indian Embassy has sent a letter to the ministry to continue to purchase the remaining 30,000 tons of DAP from the IPL on May 2.
Of the total 630,000 sacks of DAP imported from IPL during initial consignments, 430,000 sacks were found underweight by 2 to 10 kg. This had sparked protests from farmers, demanding compensation few months back.
IPL too has admitted of the short supply and promised to compensate for the shortfall.
The MoAD´s inaction, meanwhile, is set to create a deficit of at least 50,000 tons of fertilizers in the market. "That deficit will remain even if the government manages to purchase 30,000 tons of DAP from IPL and 12,500 tons of urea from MMTC before the paddy season. If the purchases are not made, the scarcity will only worsen," said Tuladhar.
Given the situation, AIC has written to the Ministry of Finance (MoF) through the MoAD, asking it to release additional Rs 2 billion for the import of additional 50,000 tons of fertilizer for the season.
Tuladhar said the AIC would need Rs 2 billion as it is preparing to import 30,000 tons of urea, 20,000 tons of DAP and 5000 tons of potash through a global tender.
The government has in 2011/12 has allocated Rs 2.5 billion to subsidize chemical fertilizers. According to MoAD, Nepal´s annual demand for chemical fertilizer stands at around 700,000 tons.