India s N, P and K Horizon: Scope & Scale of Agriculture Sector Dr. P. S. Gahlaut Managing Director Indian Potash Limited, New Delhi September 2018,
2 India s N, P and K Horizon: Scope & Scale of Agriculture Sector : Topics 1. Fertilizers - Catalysts and Derivatives of Agricultural Growth-A Symbiotic Relationship 2. Indian Agriculture Characteristics, Special Features, Dimensions of the Task, Innovations and Positive Developments 3. N, P and K Fertilizers- Demand Evolution, Growth Drivers/Retardants and Impact of Govt. Policies. 4. Demand Potential of N, P and K Fertilizers based on Crop/Soil Requirements. (a). Based on Govt. Fertilizer Recommendations (b). Based on Nutrient uptake/replacement method (c). Existing Method of Linear Regression Equations 5. Conclusions and Suggestions
3 Fertilizers : Catalysts and Derivative of Agricultural Growth-A Symbiotic Relationship
Fertiliser Consumption ('000 MT) 1970-71 1975-76 1980-81 1985-86 FERTILIZER CONSUMPTION & FOOD GRAIN PRODUCTION 1990-91 1995-96 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 Foodgrains Production ('000 MT) India has accorded high priority to use of fertilizers for achieving selfsufficiency in food-grain production and stipulated growth in other crops. 30000 300000 25000 250000 20000 200000 15000 10000 150000 5000 100000 0 50000 Fertilizer consumption (N+P+K) Foodgrain production 4
Cereal yield (mt ha-1) Nutrient vs. Yields Globally, Fertilizers account for almost 50% of the crop productivity. Some Countries like USA get much higher crop yields than India at the same 9level of nutrients as N,P and K applications in India are highly imbalanced? Fertilizer policies highly skewed towards N in India. 8 7 6 US Germany y = -0.1649x 2 + 178.97x + 15527 R² = 0.538 5 China 4 3 2 India 1 0 * Nutrient consumption are average of 2005-2014 * Note that total nutrient application refers to all crops 0 100 200 300 400 500 600 N, P 2 O 5 and K 2 O application (kg ha-1) Source: FAOSTAT for yields; IFA for nutrients (total nutrients to cereal yield is an inaccurate indicator) 5
6 Features of Indian Agriculture-Increasing Population and Food Demand
INDIA- Dimensions of the Task Total Geographical Area 327 million ha Gross Cropped Area Gross Irrigated area Total Number of Districts 640 198 million ha 96 million ha (48.6%) Number of Villages 640,867 Number of Farm Holdings Total Fertilizer Consumption (NPK) Total Fertilizer Consumption (Products) 138 millions 26.5 million t 54 million t 7
India s Agriculture Agriculture contributes 17% to country s GDP About 60% population of India dependent on agriculture 8 8
% of land holding Land Holding of Indian Farmers 100 Majority are marginal and Small farmers (less than 2 ha) 80 60 40 20 0 0-2 2-4 4-10 10+ 9 Hectares of land 9
Area, Mha Land use in India 250 200 150 100 50 0 2.3 % Land: 17%-Global Population Net sown area has almost remained unchanged over the past many decades as fast urbanization and 1950-51 1960-61 1970-71 1980-81 1990-91 2000-01 2010-11 2011-12 2012-13 2013-14 Year Net area sown Gross cropped area industrializa tion negates the new cultivated areas Forest ~ 22.5 % 33 % Non-Agricultural Uses - 16.48 Mha (1970) 24.91 Mha (2014) Agricultural land, grasslands, forestlands, others Urbanization Land under tree crops& groves..: Decreased by 16 Mha 10
11 Population Problem-Increasing Urbanization >. and increasing urbanization, i.e. need for more diverse food. More demand for horti, poultry and dairy products. >...Already shift from lowland rice to cotton, maize and horti crops. kg/capita/year cereals, fruits, meat 200 180 160 140 120 100 80 60 40 20 Consumption of food items in India as affected by income (after R. PRASAD, 2003) cereals fruit&veg meat&milk sugar oil 20 18 16 14 12 10 8 6 4 2 kg/capita/year sugar and oil 0 0 low moderate above average high income group
12 Increasing Population in India: Future Demands-Some facts and figures Demand Productivity Resources From 2003 to 2050, food consumption in India (g/capita/day) will increase by o Cereals 15% o Meat 84% o Milk 68% o Vegetables 40% o Fruit 42% o Potatoes 81% (Kearney, 2010) Productivity needs to increase by o For Wheat: An average increase of about 7.5% per annum o For Pulses: 5.3% per annum (NAAS, 2006). While per capita o Arable land will decrease (Swaminathan 2006) o Water table in Northern India is falling (Kerr, 2009)
13 LANGUAGES AND CULTURAL Kashmiri & Dogri DIVERSITY India has huge cultural and ethnic diversity. Any Communication Message has to be in more than 25 Languages /dialects to reach every nook & corner of the country
Rainfall Pattern and Seasons in India Rainfall Amount Percent of Area Receivin g Rainfall Rainfall Season Duration Dry (0-750mm) 30 Pre-Monsoon March-May 10.4 Medium (750-1500 mm) Medium (1150-2000mm) Assured (Above 2000mm) India has only about 2% of total global water. However, it has to support about 17% of global population. Rainfed area accounts for 34% of the total cultivated area, hence good monsoon is critical for Indian Agriculture 42 South- west Monsoon June-Sept 73.7 20 Post-Monsoon Oct-Dec 13.3 8 Winter or N-E Monsoon January- February Percent of Annual Rainfall Total 100.0 Total 100.0 2.6 14
15 IRRIGATION IN INDIA BY SOURCES 45 % Irrigated Area by Source 6.7 26.2 3.5 18.5 Canals Tanks Wells Tubewells Other Sources Due to water scarcity, protective irrigation methods like drip, sprinkler irrigation systems, are becoming popular particularly in Southern and Western states
Challenge 5: Contribution of different sectors in India to climate change (Sources of greenhouse gas emissions in India) Energy 61% Land use changes 1% Agriculture contributes almost onefourth to green house emissions, use of energy contributes more than 60%. Wastes 2% Industrial processes 8% Agriculture 28% 16
Contribution of Different Agricultural Sources to the Green House Gases Emission 12.5% 36.9% 3.2% Rice Cultivation Other Cereals Fruits Pulses Others Livestock Products Ruminent Meat 38.9% 4.8% 2.1% 1.1% Source: Silvia et al, 2017 17
Source: Aggarwal et al. (2002) 18 Challenge 5: Climate Change Scenarios for India Year Season Increase in Temperature, o C 2020s 2050s Change in Rainfall, % Lowest Highest Lowest Highest Rabi 1.08 1.54-1.95 4.36 Kharif 0.87 1.12 1.81 5.10 Rabi 2.54 3.18-9.22 3.82 Winters will be hotter and drier and Rabi crops like Wheat and Potato, etc may be severely affected. Kharif 1.81 2.37 7.18 10.52 2080s Rabi 4.14 6.31-24.83-4.50 Kharif 2.91 4.62 10.10 15.18
Production, Mtons Potential Impact of Climate Change on Wheat Production in India 100 90 Present ~96 million t Almost 25% reduction in wheat production expected in next 50 years or so due to temp. rise in winter 80 70 60 50 40 2016 2020 2030 2040 2050 2060 2070 Year Source: Aggarwal et al. (2002) 19
Projected impacts of climate change on Indian agriculture Cereal productivity to decrease by 10-40% by 2100. Greater loss expected in Rabi. Every 1 o C increase in temperature reduces wheat production by 4-5 million tons. This is mainly due to poor tillering and grain filling at higher temperatures. Increasing temperature would increase fertilizer requirement for the same production targets as the fertilizer use efficiency is expected to decrease. Gaseous and leaching N losses from urea, etc may increase and so may be the K leaching losses, thus further decreasing the fertilizer use efficiency of N and K fertilizers. However, P use efficiency may slightly improve with rise in temperature, particularly in Rabi season crops. More demand for N and K fertilizers. 20
5. Climate Change is a real threat. Crop production technologies need to be modified, accordingly. 21 Thus, Challenges before the Indian Agriculture: 1. Keep pace with increase in population. 2. Provide diverse food for fast urbanization. 3. Increase in food production need to be vertical as little scope for horizontal expansion. 4. Sustain soil and crop health for the future.
22 N, P and K Fertilizers- Demand Evolution, Growth Drivers/ Retardants and Impact of Govt. Policies in India
23 Contributing Factors for Growth in Fertilizer Use Particulars 1965-66 1976-77 2016-17 Fertilizer Consumption (kg/ha) 5 20 134 Gross irrigated Area (m. ha) 31 44 96 HYVs Coverage(m.ha) 0 34 82 Gross Cropped Area (m. ha) 155 167 200 Rice & Wheat Area (m.ha) 48 59 76 Fertilizer Subsidy (billion Rs.) - 0.6 700 Fertilizer Sale Points ( 000) <50 94 295
24 Production, Import and Sale of Major Fertilizers Urea DAP NP/NPKs MOP I. 2017-18 in Million MT Production 24.02 4.65 8.27 Import 5.97 4.22 4.99 4.74 Sale 30.31 8.98 8.54 3.19 II. 2016-17 in Million MT Production 24.20 4.33 7.92 Import 5.48 4.38 0.52 3.74 Sale 29.61 8.82 8.24 2.82 III. Increase/ decrease (± %) Production -0.7 7.4 4.4 Import 9.0-3.8-4.2-4.2 Sale 2.4 1.8 3.6 3.6
Million MT 25 Trend in Production and Consumption/Sale of N in India (million t) 20 18 16 14 12 10 8 6 4 2 - Production 8.05 8.43 4.07 7.30 1.80 0.95 3.14 15.58 Consumption 11.31 16.56 17.30 16.82 16.75 16.95 17.37 12.43 10.69 11.92 12.18 12.29 12.24 12.41 7.43 16.74 17.13 13.48 13.38 13.43 Year
Million MT 26 Price Sensitivity of Production and Consumption of P 2 O 5 in India (Million t) 10 8 6 4 2-0.56 7.27 8.05 7.91 Production Consumption 6.65 5.63 6.10 6.98 6.71 6.72 4.11 4.43 4.55 4.73 3.32 2.84 4.38 1.32 0.29 0.95 2.56 2.32 3.84 4.37 4.37 4.36 3.83 3.97 Year
27 Price Sensitivity Trend in of Consumption/Sale of K 2 O of in KIndia 2 O (Million t) 4 3 2 1 - Consumption 1.67 1.36 0.88 0.30 0.68 3.63 3.51 2.58 2.06 2.10 2.53 2.40 2.51 2.77 Year
N:P 2 O 5 :K 2 O use Ratio with Time Year N:P 2 O 5 :K 2 O 1991-92 5.9:2.4:1 1993-94 9.7:2.9:1 2009-10 4.3:2.0:1 2010-11 4.7:2.3:1 2011-12 6.7:3.1:1 2012-13 8.2:3.2:1 P 2 K 1 2013-14 8.0:2.7:1 2014-15 6.7:2.4:1 2015-16 7.2:2.9:1 2016-17 6.6:2.6:1 2017-18 6.2:2.4:1 4 N Desirable N:P:K Ratio 28
Fertiliser Use by Crops in India Source: Adapted from All-India Report on Input Survey, 2011-12, DAC, Agricultural Census Division 29 Fruits 2.00% Vegetables 3.10% Sugarcane 5.60% Other crops 3.90% Cotton 8.70% Oilseeds 9.60% Foodgrains 67.10%
140 120 100 80 60 40 20 0 Fertiliser Use by Crops in India (Kg/ha) K is mostly used in Horticultural and plantation crops and food crops get smaller K doses. While, P is applied to almost all crops equally. Much more N is applied to Food crops. N (kg/ha) P2O5 (kg/ha) K2O (kg/ha) Source: Adapted from All-India Report on Input Survey, 2011-12, DAC, Agricultural Census Division 30
Percent P and K Consumption in India (2016-17)- Regional Variation P K 23.6 34.6 27.8 13.9 Region P 2 O 5 (kg/ha) North 43 8 East 31 19 West 26 8 South 47 24 32.5 K 2 O (kg/ha) 30.2 14.7 22.6 North East West South In South, more K is used due to the tropical climate, more soils deficient in K and mostly plantation crops like banana, tea, coffee, spices, rice, sugarcane, etc are grown. Use of N is almost similar in all the regions, except the dry-land, rainfed areas 31
32 NPK Use in India-Some Key Issues 1. NPK fertilizer use in India is highly imbalanced. Farmers tend to over-apply and misuse Urea, being the cheapest fertilizer. 2. That leads to very low N use efficiency, from <20% in low land rice to 40% in upland crops which leads to severe N losses and environmental pollution issues like Nitrate leaching in water and ammonia and nitrous oxide gaseous pollution of air. 3. P use is many a times limited, however, some farmers also tend to use P in excess, like potato farmers in West Bengal sometimes overuse P through 10-26-26. 4. K use is very limited except the rice, plantations, horticultural crops, sugarcane etc. 5. Research trials have proved that N fertilizer use efficiency can be significantly improved with balanced fertilization of P and K.
33 Some Emerging Issues Current price policy favors N over P and K - in comparison to the agronomic value of P and K. Wheat, maize and sugarcane need more focus every where while rice in Northern states need more attention for K management as K balances are much more negative here. Continuous K mining may lead to irreversible damages to soil health in the long run. Benefit from the higher nitrogen use efficiency with K use is tremendous-even modest 10% increase will save 1.7 million t N which will further save the environment. Effective and innovative means to reach farmers about the economical, quality and stress resistance benefits of K is need of the hour.
34 Innovations and Positive Developments Much greater awareness of the need for addressing the distress of farmers / rural India at the highest level. Doubling Farmers Income a National imperative. Much higher Government outlay on production credit for farmers. Private investment in agriculture increasing with many Corporates going for contract-farming. Much greater emphasis on Water use efficiency Drip Irrigation and Sprinkler Irrigation. Education levels of farmers going up who are taking up cultivation of exotic vegetables & fruits with innovation like Green House, Poly House etc. fetching higher returns / income. Such farmers becoming role models.
35 Fertilizer Prices and Subsidies
36 Share of Subsidy and Retail Price to Total Cost of Indigenous Urea 100 90 80 70 60 50 40 30 20 10 0 31% 29% 30% 31% 29% 30% 69% 71% 70% 2012-13 2013-14 2017-18 Subsidy MRP (Estimated) Urea Retail Prices have been quite stable over the last many years.
37 100 90 80 70 60 50 40 30 20 10 0 20% 63% 70% 80% 37% 30% 2008-09 2012-13 2017-18 (Estimated) Subsidy MRP
38 100 80 60 40 17% 83% 54% 60% 20 46% 40% 0 2008-09 2012-13 2017-18 Subsidy MRP
kg paddy 6 5 4 3 2 Fertilizer and Paddy Prices- Economics over time in India Now, almost 3 and 1.25 kg paddy required to buy one kg of P and K, respectively while only 0.8 kg required to buy one kg N. Prices highly skewed towards N, leading to imbalanced use. kg paddy/kg N kg paddy/kg P kg paddy/kg K 1 0 Source: Fertilizer Statistics, 2016-17 39
40 Demand Potentials of N, P and K Fertilizers
Demand Potential of N, P and K Fertilizers based on Crop/Soil Requirements (a). Based on Govt. Fertilizer Recommendations (b). Based on Nutrient uptake/replacement method (c). Existing Method of Linear Regression Equations 41 41
N P K Balance in 2020 (million t) Nutrient Removal Nutrient additions (fert. + natural resources) Effective nutrient additions Balance N 11.87 24.3 (20.74) 12.15 +0.28 P 8.97 7.12 (6.77) 7.12-1.85 K 20.32 12.22 (3.06)* 12.22-8.22 NPK 41.16 43.643(0.58) 31.49-9.67 Source: Katyal 2001 (*Through fertilizers) 42
General Fertilizer Recommendations For Some Crops (kg/ha) CROP N P 2 O 5 K 2 O Rice 120 60 30 Wheat 120 60 30 Pulses 20 60 - Oilseeds 80 40 20 Sugarcane 150 75 50 Vegetables including Potato 150 75 75 Cotton 100 60 20 43
Million t Potential Requirement of N, P and K in India Based on the future food requirements and current potential estimates computed on the basis of state fertilizer recommendations and likely soil fertility depletions 30 25 20 19.25 21.45 23.85 15 10 5 6.0 6.9 8.6 10.1 11.6 14.5 0 K P N 2017-18 2020-21 2025-26 44
Current usage almost 100% of total recomme ndations INDIA-Potential of N use at current recommendations Crop group Million t Cereals 12.000 Pulses 0.350 Oilseeds 1.150 Cotton & Jute 1.560 Sugarcane 0.750 Vegetables incl. potato 1.300 Fruits 0.075 Others 1.350 TOTAL 18.535 45
Current usage only 67% of total recomme ndations INDIA-Potential of P 2 O 5 use at current recommendations Crop group Million t Cereals 6.000 Pulses 1.000 Oilseeds 0.650 Cotton & Jute 0.780 Sugarcane 0.300 Vegetables incl. potato 0.650 Fruits 0.035 Others 0.650 TOTAL 10.065 46
Current usage only 45% of total recomme ndations INDIA-Potential of K use at current recommendations (K 2 O) Crop group Million t Cereals 3.019 Pulses 0.245 Oilseeds 0.368 Cotton & Jute 0.190 Sugarcane 0.411 Vegetables incl. potato 0.910 Fruits 0.089 Others 0.360 TOTAL 6.091 47
48 Demand Projections of Fertilizers in terms of Nutrients (Million MT) Year N P 2 O 5 K 2 O Total 2017-18 17.24 7.22 2.84 27.30 2018-19 17.66 7.50 3.02 28.18 2019-20 18.50 7.98 3.30 29.78 2020-21 18.82 8.25 3.50 30.57 2021-22 19.13 8.54 3.71 31.38
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Conclusions and Suggestions: India has the potential to grow the consumption of P & K Fertilizers very substantially over the current levels at existing Government recommendations. While there is an effort to limit the growth of N. The Fertiliser recommendations will need to be revised in due course based on Nutrients uptake by crops and their replacement to maintain the soil health. With negligible domestic commercially exploitable sources, the growth in demand of all three Nutrients will have to be met through imports be they raw materials, intermediates or finished fertilizers. 5 0 Indian Fertilizer Subsidy is not elastic and price increases passed on to the farmers, will destroy demand. 50
Conclusions and Suggestions: India needs to be treated as an extension of their own home market by large long term players with responsible pricing for sustained growth in demand. Possibilities exist to increase fertilizer use efficiencies across the board. It is possible to get much higher agricultural output with only little increase in fertilizer use but more importantly balanced use. The need for extension & promotional activities in India including basic research, will always be there more so for P & K. Fertilizer producers / exporters with long term stake in India should share this responsibility. 5 1 51