Gujarat: Narcotics Control Bureau launches code of conduct to curb diversion of chemicals to formulate synthetic drugs
The Punjab government recently took action against seven officials of Markfed and Milkfed, the state’s marketing and milk producers’ cooperatives respectively, along with the registration of multiple FIRs over the alleged diversion of subsidised agricultural urea for industrial use. Investigators allege that neem-coated agricultural urea was diverted from the farm supply chain, repackaged, and passed off as technical-grade urea for industrial and commercial use. This has revived a longstanding national concern: why does fertiliser meant exclusively for farmers continue to find its way into factories and cattle-feed plants illegally?While the latest case has put Punjab in the spotlight, the issue itself is far from new. Over the years, several states have reported similar instances of subsidised urea being diverted despite mandatory neem coating, digital tracking, and repeated enforcement drives by the Centre. The case once again raises questions about the economics behind such diversion, the science separating agricultural and industrial urea, and the implications for farmers, industry, and the country’s fertiliser subsidy programme. Why the case became a national story Although the issue is not confined to Punjab, the latest case has become a window into a much larger question: how can India protect one of the world’s largest fertiliser subsidy programmes while ensuring that industry receives legitimate raw material through legal channels? The case has become significant because it involves cooperative institutions that are closely linked to the state’s agricultural economy. Punjab authorities have chargesheeted officials of Markfed and Milkfed, and police have registered FIRs against cooperative officers and private suppliers after laboratory testing reportedly found that material labelled as technical-grade urea was actually subsidised agricultural-grade urea. The investigation suggests that fertiliser meant for farmers may have been routed to cattle-feed plants and other non-agricultural uses.
The case challenges the assumption that mandatory neem coating has fully solved the diversion problem. When the Centre introduced 100% neem coating, the objective was not only to improve nitrogen-use efficiency in fields but also to make fertiliser unsuitable for industrial consumption. The Punjab investigation indicates that diversion networks may still be finding ways to bypass those safeguards.Story continues below this ad Agricultural urea vs industrial urea Both products contain the same basic chemical compound — urea — but they are sold for different purposes and under different regulatory regimes. Agricultural urea is a fertiliser used to supply nitrogen to crops. It is heavily subsidised, neem coated, and regulated under the Fertiliser Control Order. Industrial or technical-grade urea is used in products such as resins, plywood adhesives, melamine, textiles, dyes, moulding compounds, and some cattle-feed formulations. It is sold at market price without subsidy. The difference is visible even in the packaging. Agricultural urea is generally supplied in yellow bags carrying mandatory fertiliser markings and a neem-coating declaration, while technical-grade urea is typically sold in plain white bags carrying industrial specifications. Investigators in Punjab have treated this packaging distinction as an important piece of evidence while tracing the movement of diverted material. Why diversion continues The economics behind the alleged diversion are striking. A 45-kg bag of agricultural urea is sold to farmers for ₹266.50, or about ₹5.92 per kilogram, because the Union government bears most of the cost through subsidy. Technical-grade urea used by industries is not subsidised and generally sells for ₹55-65 per kg, (Rs 2,700-3,000 per bag) with Punjab investigators themselves citing a market price of around ₹61 per kilogram. That enormous price gap creates a powerful incentive for diversion. The subsidy, therefore, creates a mass
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