Declining Fertilizer Sales And Its Implications For Indian Agriculture

Source: Indian Express
GS III: Agriculture

Why in the News?

Fertilizer sales declined April-September 2026 despite higher production and imports, mainly due to deficient monsoon rainfall and El Nino conditions, raising concerns over crop yields and food inflation.

News in Brief

• Sales of major fertilizers, including urea, declined during April–September 2026 despite higher production and imports, indicating subdued farmer demand.
• India’s southwest monsoon rainfall was 12.6% below normal, while October recorded a 31.4% rainfall deficit, affecting soil moisture availability.
• Strong El Niño conditions may affect rabi crop yields and agricultural production, increasing the risk of food inflation.
• The editorial calls for climate-resilient agriculture, efficient resource utilization, duty-free imports and reforms in fertilizer subsidies.

Decline in Fertilizer Consumption

• Fertilizer sales declined during April-September 2026 compared to the same period in 2025.
• The decline was observed across all major fertilizers, including urea, which is the most widely used and relatively inexpensive fertilizer in India.
• Interestingly, domestic fertilizer production and imports increased during this period.
• This suggests that the decline was primarily due to weak agricultural demand rather than inadequate fertilizer availability.
• Major reason behind this decline is that deficient monsoon rainfall reduced farmers’ willingness and ability to purchase and apply fertilizers to their crops.

Impact of Deficient Monsoon Rainfall

• India received 12.6% below-normal rainfall during the southwest monsoon season (June–September 2026).
• Significant rainfall deficiencies were reported in Southern India, Marathwada and Vidarbha, Saurashtra and Kutch, Rajasthan, Bihar and Northern states.

Agricultural implications

• Inadequate rainfall reduces soil moisture, affecting nutrient absorption and fertilizer application.
• Farmers may reduce input expenditure when rainfall is uncertain.
• Even if the overall kharif sown area remains relatively stable, lower fertilizer application can adversely affect crop productivity.
• This may eventually reduce agricultural output and farm incomes.

El Nino and its impact on Indian Agriculture

• El Niño is a climate phenomenon associated with the abnormal warming of surface waters in the central and eastern equatorial Pacific Ocean.
• It influences global atmospheric circulation and can weaken the Indian summer monsoon.
• The reports highlights the possibility of a strong El Niño continuing through January–March 2027 before weakening towards April–May 2027.

Impact on agriculture;

• El Nino can weaken monsoon rainfall, affecting irrigation availability and rain-fed agriculture.
• Reduced precipitation leads to soil moisture deficits, while warmer-than normal winters can further affect rabi crop growth and yields.
• Lower agricultural production may consequently reduce food supplies and increase food inflation.

Impact on Rabi Crops

• The rabi agricultural season begins with the onset of winter, with sowing generally taking place from October onwards.
• The October rainfall deficit of 31.4% has raised concerns over soil moisture availability.
• Lower soil moisture can affect the sowing and growth of winter crops.
• Potentially affected crops include wheat, mustard, gram (chana), barley, and other winter pulses and oilseeds.
• Warmer-than-usual winter conditions can further affect crop development and productivity, particularly in crops such as wheat that require suitable temperature conditions during their growth stages.

Food Inflation and Economic Implications

• Lower fertilizer consumption and deficient rainfall may translate into reduced crop yields.
• A decline in agricultural output can create supply-side pressures on food prices.
• Consumer food inflation increased from 4.2% to over 7.7% year-on-year between April and September 2026.

Major Implications

• Rising food prices reduce household purchasing power, particularly affecting low-income families.
• Poor agricultural output can lower farmers’ incomes, while higher input costs and uncertain rainfall increase their financial vulnerability.
• Persistent food inflation may also complicate monetary policy and overall macroeconomic management.

Government Policy Options

The following measures can help address potential agricultural supply shortages and stabilize food prices.

• Duty-free Imports
  • Permit duty-free imports of essential agricultural commodities, including pulses such as masoor, chana, and yellow peas.
  • Allow duty-free imports of raw sugar and cotton until March 31.
  • Such measures can help improve domestic availability and prevent excessive price increases.
• Reduction in Import Duties
  • Consider removing the basic customs duty on crude palm oil and soybean oil.
  • An extended zero-duty or low-duty import window can provide greater certainty to importers.
  • This would encourage imports and help compensate for potential domestic production shortages.
• Strengthening Food Supply Management
  • Improve monitoring of agricultural production and food stocks.
  • Ensure timely imports of essential commodities.
  • Strengthen market interventions to prevent excessive price volatility.
  • Maintain an appropriate balance between farmers’ interests and consumer welfare.

Challenges

• Indian agriculture remains highly vulnerable to climate variability due to its dependence on monsoon rainfall.
• Excessive and imbalanced use of fertilizers, water and energy affects agricultural sustainability, while the existing fertilizer subsidy structure can encourage imbalanced nutrient application.
• Domestic shortages of essential agricultural commodities increased import dependence, making India vulnerable to international price fluctuations, geopolitical conflicts and trade disruptions.
• Further, limited adoption of climate-resilient seeds, efficient irrigation systems and weather-based agricultural planning increases farmers’ vulnerability to climate-related risks.

Way Forward and Conclusion

India should promote climate-resilient agriculture, improve water-use efficiency, ensure balanced fertilizer application and reform subsidies. Strengthening weather forecasting, diversifying crops towards millets and pulses, and improving crop insurance can reduce farmers’ vulnerability.

A shift towards sustainable farming, efficient resource utilization and long-term climate adaptation is essential to protect farmers’ livelihoods, improve agricultural productivity and ensure food security.

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