Diversion of urea to industries worsens Kharif season crisis in Telangana

Telangana faces a severe urea shortage during the Kharif season as industrial demand for DEF, resins, and pharmaceutical uses, combined with illegal diversion of subsidised urea, leaves farmers struggling to access crucial fertilizer for crops

Hyderabad: While the State is facing a severe fertilizer shortage during the critical Kharif season, diversion of urea to non-agricultural uses is considered to be a major factor adding to the crisis. The opposition parties are attributing the deepening crisis to backdoor supplies that are depriving farmers of adequate supplies.

Alongside production bottlenecks and logistical delays, the increasing demand for urea in various industries is straining supplies meant for agriculture. The subsidised price of urea (Rs 267 per 45-kg bag) for farmers makes it a prime target for diversion to non-agricultural markets, where it commands higher prices, further deepening the shortage for those who need it most.

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Urea a key component of diesel exhaust fluid

Urea, a chemical compound, is in high demand across multiple industries, allegedly diverting substantial quantities from agricultural use. This growing reliance on urea for non-farming purposes is considered a key contributor to the ongoing crisis. The main industries driving this demand include diesel exhaust fluid (DEF) production. Urea is a primary component of diesel exhaust fluid, a non-toxic solution used in diesel vehicles equipped with selective catalytic reduction (SCR) systems to reduce harmful nitrogen oxide emissions.

With Hyderabad’s rapidly growing transport and logistics sector, the demand for DEF is surging. Industry estimates suggest that DEF production consumes thousands of tonnes of urea annually, reducing the supply available for farmers. Besides this, urea is a critical raw material in manufacturing urea-formaldehyde resins, thermosetting polymers used as adhesives or binders in products like plywood and particleboard. Driven by Telangana’s construction and manufacturing sectors, particularly in infrastructure projects and urban development, the demand for these materials has skyrocketed.

Subsidised urea, originally intended for agriculture, is increasingly being diverted to meet these industrial needs, leaving farmers at a disadvantage. As a major hub for India’s pharmaceutical industry, Hyderabad is witnessing rising urea consumption in specialised applications, according to sources. While the quantities used in pharmaceuticals are smaller compared to industrial applications like DEF or resins, the cumulative effect is quite high. This additional demand further strains the already limited urea supply available for agricultural use.

Black market

The subsidised price of urea for farmers makes it an attractive target for black marketing. Reports from districts like Siddipet and Mahabubabad indicate that subsidised urea is being illegally redirected to industrial or other non-agricultural uses, fetching higher prices in these markets. A senior Agriculture Department official noted, “The price disparity makes urea a prime target for diversion, reducing availability for farmers and worsening the shortage.”

This illegal trade is compounding the challenges faced by farmers during this critical sowing season.