India reinforces fertilizer regulations with profit caps and MRP rules

The government has tightened rules for P&K fertilizers, setting profit caps for companies and mandating clear MRP and subsidy info on bags to ensure fair pricing for farmers. Overcharging is now a punishable offence under the Essential Commodities Act.

Ensuring Fair Pricing through Profit Caps

The government has reinforced regulatory measures to ensure fair pricing and smooth distribution of Phosphatic and Potassic (P&K) fertilizers, aiming to protect farmers' interests and prevent market distortions. As per the extant guidelines, any profit earned beyond the prescribed limit will be treated as unreasonable and recovered from the concerned company (profit margin of up to 8% for importers, 10 % for manufacturers and 12% for Integrated manufacturers over the cost of production of the final P&K product is considered reasonable).

Mandatory MRP and Subsidy Display

To enhance transparency, the government has mandated that every fertilizer bag must clearly display the Maximum Retail Price (MRP) along with the applicable subsidy per bag and per kilogram. Charging farmers more than the printed MRP constitutes an offence and is punishable under the Essential Commodities Act, 1955, the government said in a statement.

Enhanced Monitoring with iFMS

The production, movement, and import of fertilizers are being closely monitored through the online Integrated Fertilizer Monitoring System (iFMS). The web-based platform provides real-time oversight of fertilizer distribution, imports, and the production activities of domestic manufacturing units.

Supplier Responsibility for Distribution

In addition, all manufacturers, marketers, and importers of P&K fertilizers, including Single Super Phosphate (SSP) manufacturers, are required to ensure delivery of fertilizers up to the retail point on a Freight on Road (F.O.R.) basis, placing the responsibility of transportation squarely on the suppliers.

Strengthening Inter-Departmental Coordination

To further strengthen coordination, the Department of Fertilizers (DoF) allocates fertilizer quantities based on assessed requirements through a monthly supply plan and continuously tracks availability across regions via the iFMS portal. Weekly video conferences between the Department of Agriculture & Farmers Welfare (DA&FW), the DoF, and State Agriculture officials are also held to review the situation on the ground and promptly address any emerging supply issues.

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