Uro improves on inefficient Urea subsidies that get absorbed by the middlemen

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Today at 08:30:53 PM
Reply with quote  #644

How does URO fit in with the government subsidization of urea in India?:”Urea is imported by three STEs (state trading enterprises) – Indian Potash Ltd (IPL), MMTC and STC on behalf of the government to meet domestic shortfall. The country produces about 22 MT against an annual domestic demand of 33 MT.”

“Urea is provided to farmers at a fixed subsidized maximum retail price (MRP) of Rs 5,360 per tonne. The difference between the cost of production and MRP of urea is provided as subsidy.”

5,360.00 INR   =   90.4319 USD

Are there farmers in Rajasthan buying subsidized Urea for 3 times the price?

A typical small to medium farmer without the right connections cannot access Urea at this subsidised price. To receive this subsidy they must go through a lot of bureaucracy and significant corruption occurs at this level. Although it is displayed at this price almost no one can actually make a real purchase of Urea for 5360 INR – most pay more then 3 times this amount.

In other words, this subsidy/discount gets absorbed by the middle elements of the supply chain – such as the agents.

This kind of fake “subsidy” is “available” in many developing nations.

I have to agree with this . Such issues are discussed in Indian news channels regularly.The rampant corruption in the system is one of the main causes of many farmers committing suicide. If farmers start using URO  they are entitled to equivalent metric tonne of Urea and need not worry about the prices and the manipulation in the system. This could be revolutionary if implemented correctly. 

Also http://timesofindia.indiatimes.com/business/india-business/Government-plans-urea-price-hike-to-curb-fertilizer-subsidies/articleshow/36294375.cms   

http://www.tribuneindia.com/2011/20110822/main2.htm
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