E-Kantipur

KATHMANDU, JUL 25 -

Piling more misery on farmers hit by shortage of chemical fertilizers, the government on Tuesday decided to jack up price of diammonium phosphate ( DAP ) by 25 percent effective from Wednesday.

According to the Ministry of Agriculture Development (MoAD), price of state-subsidised DAP will now cost Rs 40 of a kilogram (kg), up from Rs 32 of a kg. However, prices of other fertilisers remain unchanged.

The MoAD officials defended the price hike, saying that it was necessary to prevent DAP from being smuggled to India due to price variance. According to the officials, Tuesday’s revision, the price for a kilogram of DAP in Nepal was Rs 6 less than the boarder price in India. DAP , without subsidy, costs Rs 64 of a kg in the local market.

“Amid complaints of smuggling of DAP to India, we (the ministry) were compelled to revise the price,” said MoAD spokesperson Hari Dahal. “However, it’s a nominal hike to match with the price in India considering farmers’ purchasing power.”

According to a source familiar with the development, the decision was taken by Prime Minister Baburam Bhattarai who currently takes cares of the MoAD.

The government has hiked the price at a time when farmers in the country are struggling to get fertilizers in the paddy plantation season. The government’s inability to supply with adquate fertilizer resulted in acute shortage of the vital farm inputs.

Officials say as far as the increase in DAP price is concerned, it will reduce the subsidy but will not affect the margin. Currently, the government is providing 40-45 percent subsidy in fertilizers.

However, some MoAD officials said subsidy will be reduced to 25-30 percent on DAP . As per the Cabinet decision made in March 2009, subsidy amounts in fertilizers for Nepali farmers should be between 20-25 percent in line with the Indian market price. The DAP covers 25 percent of the total fertilizers requirement in Nepal.

The price hike on DAP was initially planned last November under the recommendation of Agriculture Inputs Company, but the government decided against it following stern protests from farmers . On October 7, 2010, the government had hiked the prices of subsidized chemical fertilizers by 30 percent.

Meanwhile, the MoAD said 2,500 tonnes of DAP was dispatched to Nepal on Tuesday from India. 

Posted on: 2012-07-25 08:28

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