The increasing pressure of population on the available land resources, necessitates higher agricultural productivity, which can be achieved through more intensive use of fertilizer nutrients. Fertilizer is generally defined as any material (organic or inorganic; natural or synthetic) which supplies one or more of the essential chemical elements to the plants. Broadly, sixteen elements have been identified as necessary for plant growth, of which nine are required in macro quantities and seven in micro quantities.

The primary and secondary nutrients are required in 'macro quantities'. 'Primary nutrients' include nitrogen(N), phosphorus(P) and potassium(K). Indian soils are deficient in nitrogen and phosphorus. Hence, chemical fertilizers are used to meet the deficiency of these elements. For example, ammonium sulphate, ammonium chloride, ammonium nitrate, calcium ammonium nitrate,urea, etc are a source of nitrogen. Calcium(C), magnesium(Mg) and sulphur(S) are called 'secondary nutrients' and are required for plant growth in relatively smaller quantities than the primary nutrients. But, any deficiency of the secondary nutrients reduces the efficiency of primary nutrient by restricting the yield to low levels. Therefore, to obtain optimum results, crops have to be supplied with secondary nutrient in addition to primary nutrients. Iron, zinc, manganese, copper, boron, molybdenum and chlorine are a group of 'micronutrients' which are required by the plants in small quantities. Intensive cropping deplete all nutrients including micronutrients from the soil at a fast rate. Therefore selective use of micronutrients is necessary for increasing agricultural production.

As far as production of fertilizers is concerned, the Indian fertilizer industry, by meeting the demand for almost all chemical fertilizers, has played a key role in the development of the agricultural sector. At present, there are 63 large size fertilizer units in the country, manufacturing a wide range of nitrogenous and phosphatic/ complex fertilizers. Of these, 38 units produce urea; 9 units produce ammonium sulphate as a by-product. Besides, there are about 79 small and medium scale units producing single super phosphate (SSP). As a result, India is the third largest fertilizer producer in the world, with an estimated installed capacity of 121.10 lakh MT of nitrogen (inclusive of an installed capacity of 208.42 lakh MT of urea after reassessment of capacity) and 53.60 lakh MT of phosphatic nutrient (as on 30.01.2003). This rapid build-up of fertilizer production capacity in the country has been achieved as a result of a favourable policy environment facilitating large investments in the public, co-operative and private sectors.

Of the three main nutrients required for various crops (nitrogen, phosphate and potash), indigenous raw materials are available mainly for nitrogen. Hence, the Government policy has aimed at achieving the maximum possible degree of self-sufficiency in the production of nitrogenous fertilizers based on utilisation of indigenous feedstocks.

While, in case of phosphates, the paucity of domestic raw material constraints the attainment of any degree of self-sufficiency. Hence, a policy-mix has been adopted which involves the modulation of three options:- i) domestic production based on indigenous or imported rock phosphate and imported sulphur; ii) domestic production based on imported intermediates like ammonia and phosphoric acid; and iii) import of finished fertilizer like Di-Ammonium Phosphate (DAP) and very rarely, Mono Ammonium Phosphate (MAP) and Nitrogen Phosphate Potash (NPK) complexes. Roughly 70% of the requirement of phosphatic fertilizers is met through the first two options.

But, with respect to potassic fertilizers, there are no known commercially exploitable reserves of potash in the country and the entire requirement of these fertilizers is met through imports. Even in the case of complex fertilizers containing potash, the potassic content is entirely import based.

Apart from production of fertilizers, it is equally imperative that the fertilizers are made available to farmers at the right time and at affordable prices, in order to ensure sustained agricultural growth and to promote balanced nutrient application. With this objective, urea (being the only controlled fertilizer) is sold at statutorily notified 'uniform sale price', and decontrolled phosphatic and potassic fertilizers are sold at indicative 'maximum retail prices' (MRPs). Since the statutorily notified sale price and indicative MRP is generally less than the cost of production of the respective manufacturing unit, the difference is paid as subsidy or concession to manufacturers. This support to the manufacturers is provided under the 'New Pricing Scheme for urea units' and the 'Concession Scheme for decontrolled phosphatic and potassic fertilizers'. Also, as the consumer prices of both indigenous and imported fertilizers are fixed uniformly, financial support is given on imported urea and decontrolled phosphatic and potassic fertilizers. Besides, special measures have been taken to streamline distribution of available supplies through better transport, regulated supplies to priority crops and areas specified by the State Governments.

The Government ensures the quality of fertilizers through 'Fertilizer Control Order (FCO)' issued under the 'Essential Commodities Act (ECA)' to regulate the price, trade, quality and distribution of fertilizers in the country. The State Governments are the executing agencies to implement the various provisions of FCO. The Order strictly prohibits the manufacture, import and sale of any fertilizer, which does not meet prescribed standards. The 'Central Fertilizer Quality Control and Training Institute at Faridabad' and its 3 regional centres have been set up for inspection and analysis of imported and indigenous fertilizers, giving technical advice and providing training on quality control to state enforcement agencies and analysts. The FCO has been recently amended to make it more user friendly and ensuring effective enforcement. Printing of Maximum Retail Price (MRP) on all fertilizers including urea is now mandatory along with the printing of month and year of manufacture or import of fertilizer.

In order to promote the use of bio-fertilisers as an environment friendly and cheaper source of plant nutrients, a 'National Project on Development and Use of Bio fertilizers' was started by the Government during the sixth plan and has been subsumed under a new Central sector scheme of 'National Project on Organic Farming' from October 2004. As a result, National Centre of Organic Farming (NCOF) and Regional Centres of Organic Farming (RCOF), have been set up for promotion, extension, training and demonstration of bio-fertilizers. Presently, there are around 125 bio-fertilizers production units in the country with an annual capacity of 18,000 tonnes of different types of bio-fertilisers and the annual production is about 10,000 tonnes.

Besides, the Government is also implementing a new scheme 'National Project on Organic Farming' since October 2004 with an outlay of Rs 57.05 crore for production, promotion, market development of organic farming in the country. The main components of the scheme include:-

1. Putting in place a system of certification of organic produce


2. Capacity building through service providers
   
   
3. Financial support for commercial production units for production of organic inputs like fruits and vegetable waste compost units bio fertilizers production; hatcheries for vermi culture and


4. Promotion, extension and market development of organic farming.

As a result of all such efforts, consumption of chemical fertilizers (in terms of nutrients) has broadly shown an increasing trend. Today, India is the third largest consumer of fertilizers in the world. The consumption of major fertilizers namely, Urea, DAP, MOP, SSP and Complexes are estimated to be 22.2, 6.8, 2.6, 2.8 and 6.7 million tonnes respectively during 2005-06. Though the nitrogenous fertilizers account for over 60 per cent of total consumption (in terms of nutrients), the share of potassic fertilizers is also increasing in recent years (it increased from a share of 9.6 per cent in 2001-02 to 11.8 percent in 2005-06. The all-India average fertilizer consumption is 96.4 kg./ha of NPK nutrients, though there is wide variation from State to State ( from 197 kg./ha in Punjab and 164 kg./ ha in Haryana to less than 10 kg./ha in Arunachal Pradesh, Nagaland, and Sikkim). Considering the skewed pattern of fertilizer use, Government of India is promoting balanced and integrated use of fertilizer nutrient.