Agriculture Pressed by Fertilizer Costs: How Can Almost the Entire Budget Go Toward Fertilizer Purchases?

In Nepal, the most commonly used chemical fertilizers are urea, DAP (diammonium phosphate), and potash.

Among these, urea and DAP are the most widely applied fertilizers.

The government provides substantial subsidies through cost-sharing with farmers.

According to Dr. Ram Krishna Shrestha, undersecretary at the Agriculture Development Division of the Ministry of Agriculture, Forests, and Environment, there is an established pricing mechanism for fertilizer.

A fixed retail price is set at the fertilizer’s entry point into the country to prevent smuggling.

To that price, a cooperative management fee of NPR 1 per kilogram and transportation costs based on location are added.

Currently, the average cost price of urea is NPR 120 per kilogram and DAP NPR 165 per kilogram. The entry point price is NPR 15 per kilogram for urea and NPR 44 per kilogram for DAP, including transport and cooperative management fees, he said.

In other words, the government bears most of the fertilizer cost as subsidies.

The fertilizer supply process is highly complex, according to experts.

From the day of tenders being issued, it takes approximately 220 days or seven months for fertilizer to arrive in the country, said Shrestha.

The procurement process for the next year’s fertilizer must begin well in advance, he added.

The war in Iran has resulted in several issues with fertilizer supply.

“Firstly, production and supply have decreased because some regions lack access to natural gas and some factories have been damaged in attacks. Secondly, lower production drives prices up. Thirdly, transportation has become more expensive and complicated due to blockades at the Hormuz Strait,” said Undersecretary Shrestha.

For the fiscal year 2082/83, the government aims to supply a record 600,000 metric tons of chemical fertilizer, allocating NPR 2.882 billion for this purpose.

As of the statistics from Shrawan 1 to Jestha 18, 557,000 metric tons of fertilizer have been supplied, including 465,000 metric tons sold from last year’s stock. The ministry’s data shows 140,000 metric tons remain in warehouses.

Two weeks ago in Parliament, Agriculture Minister Geeta Chaudhary said that due to the war in the Middle East, nearly 200,000 metric tons of fertilizer, though contracted, have yet to arrive.

Minister Chaudhary noted that the government is closely monitoring to ensure no fertilizer shortage during the rice transplanting season. “The ministry is pressuring suppliers to provide fertilizer promptly,” she stated.

The process to purchase 50,000 metric tons of fertilizer from the Indian government is also underway.

Undersecretary Shrestha said that if the delayed fertilizers are supplied soon, there will be enough fertilizer readily available through the coming Ashoj month (mid-September to mid-October).

Following post-war agreements, alternative sources and shipping routes for fertilizer imports are also being considered, he added.

While the current situation may avoid an immediate fertilizer shortage, experts express concern about growing dependency on chemical fertilizers placing pressure on national resources and affecting the long-term health of soil.

In Nepal, fertilizer use varies by region — in the Terai, use can reach 218 kilograms per hectare, whereas in hilly areas like Gandaki, it’s only about 40 kilograms per hectare.

“Based on cultivable land area, crops planted, and quantitative calculations, annual fertilizer demand would be approximately 1.737 million metric tons. However, farmers’ minimum demand is around 800,000 metric tons. The Terai region uses fertilizer beyond recommended amounts, while other areas apply less,” said Shrestha.

But this high dependency on chemical fertilizers is harmful to agriculture, said Uddhav Adhikari, campaign coordinator for Agriculture for Food.

“Soil nutrients must be supplied not only through artificial means but also through natural processes,” Adhikari warned, noting that the trend toward chemical fertilizer use risks turning land into desert.

He pointed out that there are many options for producing organic fertilizer, citing that Kathmandu Metropolitan City alone generates 1,500 tons of waste daily with 60 to 80 percent organic matter suitable for compost. Similar circumstances exist in all municipalities, making granular organic fertilizer production feasible. However, he added, the focus remains on establishing chemical fertilizer factories.

Government officials also acknowledge that excessive use of chemical fertilizer is not ideal for soil health.

“Chemical fertilizers provide direct nourishment to plants, while organic fertilizers first nurture the soil, which then nourishes plants; this is sustainable agricultural practice,” said Ram Krishna Shrestha, undersecretary at the Ministry of Agriculture.

He further noted that dependency on chemical fertilizers increases state subsidy burdens and negatively affects soil health.

Common recommendations include balanced fertilizer use, soil conservation, crop rotation, and promoting traditional methods such as organic and green manures.

Experts warn that failure to adopt such measures risks turning soil into desert.