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Fertilizers (also spelled fertilisers) are compounds given to plants to promote growth; they
are usually applied either via the soil, for uptake by plant roots, or by foliar feeding, for
uptake through leaves. Fertilizers can be organic (composed of organic matter), or inorganic
(made of simple, inorganic chemicals or minerals). They can be naturally occurring
compounds such as peat or mineral deposits, or manufactured through natural processes
(such as composting) or chemical processes (such as the Haber process).

Fertilizers typically provide, in varying proportions, the three major plant nutrients
(nitrogen, phosphorus, and potassium), the secondary plant nutrients (calcium, sulfur,
magnesium), and sometimes trace elements (or micronutrients) with a role in plant
nutrition: boron, chlorine, manganese, iron, zinc, copper, and molybdenum.

In the past, both organic and inorganic fertilizers were called "manures," but this term is
now mostly restricted to man-made manure.Though nitrogen is plentiful in the earth's
atmosphere, relatively few plants engage in nitrogen fixation (conversion of atmospheric
nitrogen to a biologically useful form). Most plants thus require nitrogen compounds to be
present in the soil in which they grow.




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The Indian fertilizer industry has succeeded in meeting almost fully the demand of all
chemical fertilizers except for MOP. The industry had a very humble beginning in 1906,
when the first manufacturing unit of Single Super Phosphate (SSP) was set up in Ranipet
near Chennai with an annual capacity of 6000 MT. The Fertilizer & Chemicals Travancore of
India Ltd. (FACT) at Cochin in Kerala and the Fertilizers Corporation of India (FCI) in Sindri
in Bihar were the first large sized -fertilizer plants set up in the forties and fifties with a view
to establish an industrial base to achieve self-sufficiency in foodgrains. Subsequently, green
revolution in the late sixties gave an impetus to the growth of fertilizer industry in India.
The seventies and eighties then witnessed a significant addition to the fertilizer production
capacity.

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The installed capacity as on 30.01.2003 has reached a level 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, making India the 3rd largest fertilizer producer in
the world. The 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. Presently, there are 57 large sized fertilizer plants
in the country manufacturing a wide range of nitrogenous, phosphatic and complex
fertilizers. Out of these, 29 unit produce urea, 20 units produce DAP and complex fertilizers
13 plants manufacture Ammonium Sulphate (AS), Calcium Ammonium Nitrate (CAN) and
other low analysis nitrogenous fertilizers. Besides, there are about 64 medium and small-
scale units in operation producing SSP.

India is the third largest producer and consumer of fertilizers. The installed capacity of the
fertilizer industry as on November 1, 2006 was 123 lakh MT of nitrogen and 57 lakh MT of
Phosphatic nutrient. During April-October 2006, total fertilizer production grew by 6% over
the corresponding period of the previous year. While phosphatic fertilizer production
increased by 13%, urea production grew by 3%. The import of manufactured fertilizers
during H1¶07 compared to H1¶06 also surged by about 39%.Some of the main issues
confronting the fertilizer industry are with respect to pricing and availability of feedstock.
With the industry competing with the power sector for gas and the Government favoring
conversion of existing Naphtha based units to gas, shortages are expected in future as well.

The existing Naph based units have been given time till end of FY¶2009 for conversion to
gas. The government recently approved the Stage III of the Urea pricing policy based on
the recommendations of the Dr.Y.K.Alagh Committee. The scheme will be effective from
October 1, 2006 till March 31, 2010. The policy seeks to encourage efficiencies in
production and distribution of Urea. The government has also dispensed with the prior
permission required for producing beyond 100% of the installed capacity. As per industry
estimates, the total subsidies for the fertilizer sector in FY¶07 would be around Rs.34,036cr
including an amount of Rs.5,913cr carried over from the previous fiscal. However, the
budget estimates for FY¶07 were far lower at Rs.17,252cr. Even after accounting for two
supplementary grants, a gap of Rs.11,583cr exists. Inadequate subsidies as well as delays
in disbursement of allocated subsidies have added to the problems of the industry.

The budget lays emphasis on agricultural development with higher allocation under various
programmes. The Bharat Nirman programme continues to be the cornerstone of the
Government¶s policy and an additional 24 lakh hectare is to be bought under irrigation
under this policy. Budgetary support for the programme has been increased from Rs.18,600
cr in 2006-07 to Rs.24,603 cr in 2007-08. Under the accelerated irrigation development
programme, 35 new projects are to be completed and an additional irrigation potential of 9
lakh hectares is to be created. The outlay for the programme has increased from Rs.7,121
cr in 2006- 07 to Rs.11,000 crore in 2007-08. Customs duty on drip irrigation systems and
agricultural sprinklers has been reduced from 7.5% to 5%. Subsidy outlay for the fertilizer
sector has been increased from Rs.17,252 (B.E 2006-2007) to Rs.22,452 cr in R.E.2006-07.
Department of Fertilizers is to work along with the industry in evolving a mechanism for
administering subsides directly to the farmers. A pilot programme for the same is to be
implemented in at least one district of each state in FY 2008.

Peak rate of customs duty on all fertilizers has been reduced to 7.5% which is likely to have
an impact on the realizations of players manufacturing complex fertilizers and other
secondary nutrients. At the same time, imports of Urea used for the manufacture of
complex fertilizers will attract a lower duty of 5%. The main fertilizer products of Urea and
DAP will continue to attract lower duties at 5%. In terms of subsidies, though the budget
has increased the quantum of subsides for the sector, this is likely to be inadequate. It may
be noted that the R.E 2006-07 and budgeted estimate for 2007-08 are similar and, with no
change in the farmgate prices of fertilizer and rising feedstock costs, the actual subsidy
burden is likely to be much higher than the allocated amount. It is however expected that
the government will continue to reimburse the industry with the subsidy component albeit
with delays.

The focus on agricultural development is likely to benefit the fertilizer sector indirectly.
While the increased area under irrigation is likely to have a positive impact on fertilizer
consumption, the ability of the domestic industry to take advantage of the same remains to
be seen.

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Fertilizers are compounds that are added to plants to promote growth. There are two types of fertilizers -
organic and inorganic. Organic fertilizers are carbon based and are composed of organic matter like leaves,
cow dung and parts of plants. Inorganic fertilizers contain simple inorganic chemicals. Some of the common
nutrients present in fertilizers are nitrogen, phosphorus and potassium (NKP). They also contain secondary
plant nutrients such as calcium, sulphur and magnesium. Some special fertilizers contain trace elements or
micronutrients for the nutrition of plants like boron, chlorine, manganese, iron, zinc, copper and
molybdenum. It is vital that farmers know the exact combination of fertilizers to be used for a certain crop
to avoid damage through excessive or improper use.

While fertilizers help in plant growth, pesticides work as a safeguard against pests. Basically, a pesticide is a
substance or mixture of substances designed for preventing, destroying, repelling or lessening the damage
of a pest. Pesticides may be made of a chemical substance or a biological agent such as a virus, bacteria,
pest repelling weeds and pest eating insects, fish, birds and mammals. In this section, pesticides refer only
to those pesticides that include chemical substances such as phosphamidon, lindane, chlorpyrifos,
heptachlor and malathion. Many pesticides are known to be poisonous to humans. The government has
banned some pesticides while the use of others has been regulated.