Task force formed to ensure purchase of domestic fertilizer output, subsidy burden hard for ministry

The Ministry of Agriculture, Forests and Environment has formed a study task force to find legal and policy measures to ensure the purchase of chemical fertilizer once domestic factories begin production. Minister Geeta Chaudhary formed the task force through a ministerial-level decision on Thursday, bringing together experts from the agriculture, finance, industry and energy ministries as well as the Public Procurement Monitoring Office.

Ministry spokesperson Dr Maheshwar Dhakal said the task force will study the market, the possibility of government purchase and the institutional structure needed once fertilizer production begins. He said the step was taken because there is currently no clear law on purchasing domestically produced fertilizer.

Meanwhile, the ministry has informed Parliament's Agriculture and Natural Resources Committee that it is becoming difficult to bear the fertilizer subsidy burden. According to Secretary Dr Rajendra Prasad Mishra, at current prices a subsidy of about Rs 120 per kg must be given for DAP fertilizer alone, and an estimated Rs 59 billion will be needed to meet upcoming demand.

He said a work plan has been advanced to ensure timely purchase and supply so there is no fertilizer shortage after Falgun, with demand peaking from Baisakh to Shrawan. Secretary Mishra said a new mechanism is being sought to manage the subsidy burden. Although coordination with the Ministry of Finance is under way, raising such a large amount remains difficult for the government.