The agriculture ministry in turn has shifted the blame for the delay to the Bureau of Industrial Costs and Prices (BICP) to which it has entrusted the computation of costs of production. The recommendations of BICP are awaited. The concession rates are to be based on the computed costs of production.

In a note prepared for Cabinet discussion, the fertiliser ministry has observed that both the domestic production of phosphate and imports of decontrolled fertilisers have suffered due to the continuing uncertainty about rates of concession.

So far 8.20 lakh tonne of DAP and two lakh tonne of MoP imports have been contracted for the current kharif season. Till June-end, 4.51 lakh tonne of imported DAP has arrived as against imports of 7.46 lakh tonneduring the corresponding period in the previous year. Since further contracting is not being done by importers due to obvious uncertainty over concession rates, the agriculture ministry has authorised Indian Potash Ltd to import two lakh tonne of DAP for augmenting the availability of this vital agricultural input. Out of this, 0.75 lakh tonne of DAP is expected to arrive by August-end. The total expected arrivals of DAP on private trade account by September add to about 2.68 lakh tonne.

The availability of MoP is also becoming critical. Against 5.7 lakh tonne of imports during April-June 1997, only 2.18 lakh tonne of MoP could be imported till June 1998. However, the total expected arrivals of MoP during the second half of the kharif season are at 4.34 lakh tonne.

The cumulative production of phosphate during April-June 1998 is 6.44 lakh tonne as against the target for the period at 7.2 lakh tonne. The phosphate production in April-June 1998 is also lower than the level achieved in the correspondingperiod in the previous year which was 6.89 lakh tonne. The total capacity utilisation in May was 96.3 per cent for phosphate which declined to 86.6 per cent in June.

The fertiliser ministry also observed that till mid-June, the availability of DAP was 13.20 lakh tonne as against 17.14 lakh tonne in the corresponding period in the previous year. Similarly, the availability of MoP till mid-June was only 2.58 lakh tonne as against 5.80 lakh tonne in the corresponding period in the previous year. The states of UP, MP and Rajasthan have been demanding augmentation of supplies of DAP and MoP.

Shortages has also been noticed in case of urea and other nitrogen fertilisers. The cumulative production of nitrogen during April-June 1998 is 23.06 lakh tonne as against the target of 23.86 lakh tonne. The total capacity utilisation for nitrogen in May was 88.5 per cent and that in June was 93.1 per cent. But the despatches of urea during June were only 14.87 lakh tonne as against the target of 16 lakh tonne. Theshortfall was on account of the confusion about prices in the period June 2-13 and loss of production in some of the fertiliser plants namely RCF, Kribhco, FACT-Cochin, NFL-Panipat, NFCL-Kakinada.

Clarifying the current urea position, the fertiliser ministry noted that due to high levels of inventory at the beginning of the current kharif season, the import on government account was deferred to the second quarter of the season. In June, 0.25 lakh tonne of imported urea arrived in the country. The MMTC has been authorised to import 2.5 lakh tonne of urea on government account by September.

The average daily loading of fertilisers by rail during May was 2,590 wagons per day as against 3,130 BG wagons per day in the corresponding period in the previous year. Similarly, the average daily loading of fertilisers by rail during June was 2,806 BG wagons per day as against 3,184 BG wagons per day in the corresponding period in the previous year. The reduced level of loading by rail is due to lower arrivals ofimported fertilisers.