Expenditure against distribution of Urea by ASAMB
Introduction:
♦ To streamline the allocation and distribution of urea and to address constant allegation of urea being sold at higher rates within the state of Assam, there was a need to plug the gaps in the fertilizer administration for making the heavily subsidized national essential commodity available to farmers at notified rates across the state.
Background:
♦ There was a need to streamline the allocation and distribution of urea within the state, especially related to unplanned arrivals of urea at specific rake-points and consequent distribution to wholesalers and retailers.
♦ There was constant allegation of urea being sold at high rate.
♦ It had been found that urea wholesalers in Assam was playing a role of mediatory taking all benefits from urea supplying companies right from secondary freight subsidy to dealer margin of Rs. 354.00/MT without passing anything to the retailers.
In order to address all the issues, the Hon’ble Cabinet in its meeting held on 7th May, 2022, decided-
► To eliminate urea wholesalers from the distribution channel, so that the secondary freight subsidy and dealer margin go directly to the retailers making urea available to the farmers at the notified rate.
► To act Assam State Agricultural Marketing Board (ASAMB) as the sole wholesaler in the state.
► To provide financial assistance of Rs. 20.00 per 45 Kg bag of urea to retail fertilizer dealer through a proper mechanism.
Accordingly, a ‘Comprehensive Standard Operating Procedure (SOP) for Fertilizer (Urea) Administration in Assam’ has been notified by Agriculture Department on
20-05-2022. Subsequently, ASAMB has been notified as sole wholesaler of urea in Assam, vide Director of Agriculture’s notification Memo No. Agri/Fert/C&F/627/2021-22/31,
dated 01-06-2022.
As per the SOP, fertilizer supplier companies need to deliver urea at retailer’s point. Due to undulating topography and difficult terrain from hilly area to riverine areas affects the handling & transportation cost of urea by the supplier companies within the approved subsidised secondary freight. The companies prefer to deduct the secondary freight subsidy along with the dealer margin of Rs. 354.00 per MT from invoice-value instead of delivery to retailer’s point.
In lieu of handling & transportation of urea as decided by the Hon’ble Cabinet to incentivise the retailers (urea) an effective mechanism is required so that the retailers will be motivated for selling urea to the farmers through POS at notified rate. The incentivisation will create competitiveness and liableness amongst the retailers. This will encourage the retailers to enhance their performance and services towards the farming community. Consequently, the farmers/beneficiaries will be able to purchase urea at subsidised notified rate at their vicinity.
Applicability:
The incentive of Rs. 20.00 per 45 Kg bag of urea will be available to all the retail dealers of urea across the state having a valid licence and iFMS ID. However, the retailers will be eligible to get the incentive based on the quantity of Urea sold through the POS device only.
Nodal Agency:
The incentive is routed through the Assam State Agricultural Marketing Board (ASAMB). A Consolidated Fund for the purpose may be created by the Govt. to mitigate the requirement. The ASAMB will place the requirement of fund to the Govt. through the Director of Agriculture, Assam. ASAMB is to release the incentive amount as per the guidelines framed for the purpose by the Director of Agriculture by maintaining a separate bank account.
Disbursement of incentives to retailers (urea):
The retailers will compulsorily sale urea to farmers/beneficiaries through POS/ePOS system at notified rate.
For incentivising the retailers under ASAMB, the Depot Manager/Asstt. Depot Manager of District Fertilizer Unit (DFU) under ASAMB will collect the incentive claim bills from the urea retailers as per prescribed format. The DFU will verify the incentive claim bills, certify and forward to ASAMB for further processing and payment.
The company representatives will collect the incentive claim bills from their direct urea retailers in the same format. The company representatives will verify the incentive claim bills, certify and forward to ASAMB for further processing and payment.
After receiving the duly certified incentive claim bills, ASAMB will tally the same with POS records available in the iFMS portal. Accordingly, the entitled quantity for incentive will be finalised and release the incentive the eligible retailers. ASAMB will furnish the utilisation certificate (UC) in due course.
Financial Requirements:
In FY 2023-24, ASAMB has distributed 1,45,996.425 MT i.e. 32,44,365 bags (45 kg) of urea in the state. As such, requirement of fund for payment of incentive against aforesaid quantity will be approximately Rs. 649.00 lakh.
However, this estimation of required fund has been prepared against the quantity of urea already distributed by ASAMB to the retailers.
Quantity of Urea already distributed = 1,45,996.425 MT.
= 32,44,365 Bag of 45 Kg.
Incentives to retailers(urea) = Rs. 20/- per 45 kg bag.
Requirement of fund = Rs. 649.00 lakh.
(Rupees six hundred forty-nine lakh) only.
Monitoring:
The incentivisation will be monitored by the District Level Standing Committees constituted by the Agriculture Department, Govt. of Assam and report to the Director of Agriculture, Assam.
Conclusion:
Incentivisation will motivate the retailers to enhance their performance and services towards farming community. Consequently, the farmers/beneficiaries will be able to purchase urea at subsidised notified rate at their vicinity. This will definitely help to boost up the agrarian economy of the state