One Nation, One Fertiliser mandate: Companies may risk losing brand edge

India has implemented a 'One Nation, One Fertiliser' scheme under which it has made it mandatory for companies selling urea, DAP (di-ammonium phosphate), MOP (muriate of potash), and NPK (nitrogen, phosphorus, and potassium) to sell their products under a common brand 'Bharat'.

"The single brand name would be Bharat Urea, Bharat DAP, Bharat MOP, and Bharat NPK, etc., for all fertiliser companies, state trading companies, and fertliser marketing entities," a statement from the government said on Wednesday.

The government said that a logo indicating fertiliser subsidy scheme 'Pradhanmantri Bhartiya Janurvarak Pariyojna' should be used on said fertiliser bags. A new bag under the scheme would be introduced from October 2 and the companies have been given time till December 12 to exhaust old bags.

Sharing new bag designs, the government said two-thirds of the bags would carry the new brand identity and logo and the company logo, and other details will get one-third space.

The government wants the companies to have one single brand name for urea and other fertilisers instead of several brand names.

"This will help reduce freight charges due to stopping of criss-cross movement of fertilisers, reducing the transit time, ensuring the availability of throughout the year irrespective of brand preferences, and stopping the diversion of urea for industrial purposes," it had said earlier.

Also, according to an Indian Express report, the government bears subsidies on some 26 fertilisers. It also decides MRPs and where the companies can sell their products. So, when the government is spending so much on subsidies it would want to take some credit and, more importantly, send that message across to farmers who have been at war with the government for long.

Despite the ‘One Nation One Fertiliser’ plan, most Indian fertiliser companies rose on BSE because of news that European firms were scaling down ammonia production due to rising natural gas prices. This would mean more exports for Indian firms such as GNFC (Gujarat Narmada Valley Fertilisers & Chemicals Ltd) and Chambal Fertilisers.

A Business Standard report quoted an industry official as saying that the move could harm fertiliser companies in terms of brand value. The official said brands, apart from being product differentiator, also helps in building the firm's image while going into the farmers’ fields.

"Fertiliser companies do a lot of extension activities such as field-level demonstrations, crop surveys etc., where their brands are displayed prominently, and it also helps reach out to the farmers. All this will now stop,” the official said as per the report. He suggested, "The company name can be mentioned in a very small portion of the total packaging."

Apart from this, there are other speculated drawbacks. Under this programme, fertiliser companies are expected to get reduced to just contract manufacturers and importers for the government.

Also, the scheme might hit back at the ruling BJP because, as of now, the company is blamed in case any bag or batch of fertiliser is not up to the standards. But after the scheme's implementation, the onus may be put on the government.

Congress leader Jairam Ramesh hit out at the government over the One Nation, One Fertiliser scheme with a phrase: "One Nation, One Man, One Fertiliser".