KATHMANDU, July 5: The shortage of chemical fertilizers does not seem likely to ease as the state-owned Agriculture Inputs Company (AIC) is facing shortage of funds for procurement of the planned 30,000 tons of Diammonium Phosphate (DAP) from India.
AIC, which is also the state-owned importer and distributor of fertilizers, is only in a position to procure 5,000 tons of DAP from Indian Potash Ltd (IPL) that was designated by the Nepal government to supply 30,000 tons of DAP.
According to officials, at least 100,000 tons of fertilizers are required to meet the current demand.
Farmers who are facing acute shortage of fertilizers in the ongoing paddy season will not be able to start plantation if the government does not release sufficient funds for procurement of fertilizers immediately.
As per the instruction from the Ministry of Agriculture Development (MoAD), AIC had signed a deal to purchase 11,000 tons of DAP from IPL in the first installment through Indian Farmers Fertilizers Cooperative Ltd (IFFCO) at Maximum Retail Price (MRP) of IRs 4,300 (NRs 6,880) per ton.
“We need at least Rs 700 million for procurement of 11,000 tons in the first phase. But AIC can only manage a fund worth Rs 337 million which is sufficient for procuring only 5,000 tons,” said Hari Dahal, spokesperson for MoAD, on Wednesday.
Of the Rs 337 million of available fund, AIC has arranged Rs 107.7 million from MoAD while Rs 230 million was released by the Ministry of Finance.
In a bid to ease the supply of fertilizers, AIC had decided to procure 30,000 tons of DAP from the tainted IPL which was found to have supplied underweight sacks of fertilizers four months ago. Then parliamentary Public Accounts Committee (PAC) had instructed the government to blacklist the Indian firm.
The government has allocated Rs 2.83 billion to procure subsidized fertilizers for the fiscal year 2011/12. The government has procured and distributed a total of 140,000 tons of chemical fertilizers for the current fiscal year.
Dahal said existing crunch of fertilizers would not ease if the government fails to release additional amount to import the planned 30,000 tons of DAP.
Meanwhile, as per the request letter sent by Nepal government to India on December 21, 2011 to sell 50,000 tons of DAP and 100,000 tons of urea at import parity price for the upcoming fiscal, the Indian government has agreed to supply 100,000 tons of NPK (composite of nitrogen, phosphorus and potash).
“The Indian government has designated Pradeep Phosphorus Ltd based in Bhubaneshwor of Odissa state to supply 100,000 tons of NPK to Nepal in response to our request,” said Dahal.
According Dahal, the Indian firm has expressed its ability to supply 20,000 tons of NPK per month to Nepal. “The company has requested us to send purchase order in time for the fiscal year 2012/13 so that it can supply the required fertilizers on time,” Dahal added.