Fertilizer Firm Accused of Forcing Farmers to Buy Unwanted Products

In a move to address anticompetitive practices in the fertilizer industry, India's Competition Commission (CCI) has ordered an investigation into government-owned Rashtriya Chemicals and Fertilizers (RCF) for allegedly forcing farmers to purchase additional products alongside subsidized urea.

The investigation was prompted by a complaint filed by Raghunath Patil, a prominent farmer leader from Maharashtra. Patil alleged that RCF, a 'Navratna' company, has been contravening competition laws by compelling dealers and farmers to buy other fertilizers and products as a precondition for accessing subsidized urea.

The CCI, after a preliminary assessment, found merit in Patil's allegations. In its order, the Commission noted that RCF's conduct appears to violate several provisions of the Competition Act, including restrictions on tying arrangements and abuse of dominant position. The CCI has directed its Director General to complete the investigation and submit a report within 60 days.

The issue of forced bundling of products with subsidized urea has been a longstanding concern for Indian farmers. The Department of Fertilizers had previously warned companies against this practice, which effectively denies farmers the freedom to choose their purchases. With RCF commanding a 43% market share in 2023-24, farmers had little choice but to acquiesce to the company's demands, according to the complaint.

The CCI's decision to initiate a probe underscores the government's commitment to ensuring a fair and competitive fertilizer market, where farmers can access essential inputs like urea without being coerced into unwanted purchases. The outcome of the investigation will be closely watched, as it could have significant implications for the country's agricultural sector and the broader competition landscape.