India - Effective demand for fertilizers

Roport No. SA-31 This report may not be published nor may it be quoted as representing the views of the Bank Group. The Bank Group does not accept resporisibility for the accuracy or completeness of the report. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION A JOINT STUDY WITH THE GOVERNMENT OF INDIA EFFECTIVE DEMAND FOR FERTILIZERS IN INDIA March 27, 1972 Prepared by: W. B. Donde - Government of India Dorris D. Brown - IBRD   ABBREVIATIONS N - NITROGEN IN ANY FORM p _ PHOSPHATE OR P205 ICAR - INDIAN COUNCIL OF AGRICULTURAL RESEARCH IARS - INSTITUTE FOR AGRICULTURAL RESEARCH STATISTICS IADP - INTENSIVE AGRICULTURE DISTRICT PROGRAMME HYV - HIGH YIELDING VARIETY (SEEDS) Kgs - KILOGRAMS M.TONS - METRIC TONS FAI - FERTILIZER ASSOCIATION OF INDIA Rs 7.50 - US$1.00 as used in this report   I N D I A EFFECTIVE DEHAND FOR FERTMIIZERS IN INDIA Table of Contents Page PREFACE i - ii SUMKARY Chapter 1 Introduction 1 Chapter 2 Characteristics of Demand for Fertilizers 7 Chapter 3 Projection of Fertilizer Demand 16 Chapter 4 Conclusions and Observations 23 Annexes Annex 1 The Available Data Annex 2 Consumption of Fertilizers N and P by Districts and States - Tables I to XIX Annex 3 Fertilizer Projection by Districts - Tables I to XVI   PREFACE This study on Effective Demand for Fertilizers in India originated with the International Bank for Reconstruction and Development, as a part of its work of appraising the economic feasibility of investment proposals for India's rapidly expanding fertilizer industry. The Government of India welcomed the study and arranged participation in it as a joint endeavor. The Ministry of Food and Agriculture constituted an Advisory Committee to work with the joint team for planning and guiding the study. The study was initiated in August 1969 and completed in May 1971. The State Departments of Agriculture provided the data on fertilizer consumption in each district each year from 1959-60 to 1968-69. The Directo- rate of Economics and Statistics in the Ministry of Food, Agriculture, C.D. and Cooperation provided the time series data in area under crops, irrigated area and farm harvest prices. The metearological office, Poona supplied the district data on normal rainfall and its variability. And the experts at the State and Central levels gave valuable information regarding probable changes in irrigation and new agricultural technology. The statistical work and computer operations were performed by the staff at the Indian Institute of Agricultural Research Statistics under the direction of Dr. Daroga Singh. The report is based on the available district data, projected ferti- lizer demand, district by district, up to 1973-74 and for the States and the Nation for 1978-79. The actual consumption for the first two years, 1969-70 and 1970-71, falls well within reasonable limits of statistical error for these years. This gives some confidence in the validity of the projection method and reasonable hope that the actual consumption in future years would also not be very different from the projected figures. All the same, the authors of the report have recognized the limitations of the projection model used and have suggested continuation of the study with special emphasis on the factors influencing demand for fertilizers. The data compiled for each district during the study could be updated every year and supplemented with other information as needed for analysis of fertilizer demand and other agri- cultural development issues. In a study of this type one becomes indebted to a large number of participants in India and in the Bank. A special word of appreciation is due the staff of the Directorate of Economics and Statistics for their work in compiling the data, and Dr. Daroga Singh and his staff at the Indian Institute of Agricultural Research Statistics provided major assistance in the development of the conceptual design, the testing of statistical models and the operation of the computer. Special thanks are due D. L. Ralhan, 3. K. Raheja, and K. S. Krishnan of the IARS and V. V. P. Rao of the Directorate of Economics and Statistical Division for their unstinted Bfforts. Within the Bank, Ben King, Bong Suh Lee and Arun Shourie assisted Ln the conceptual design and review. Many others assisted with various phases  - ii - of the work. A special word of appreciation is due each one. However, the authors take full responsibility for the results. W. B. Donde - Economist, Directorate of Economics and Statistics Ministry of Food and Agriculture C.D. and Cooperation New Delhi, India Dorris D. Brown - Agricultural Economist International Bank for Reconstruction and Development Washington, D.C.  SUMMARY i. In this study the characteristics of demand for fertilizers were investigated and the results used to project demand for nitrogen (N) and phosphate (P) by districts through 1973/74 and by States and for all-India for 1978-79. The 1973/74 projected demand of 2.4 to 2.9 million tons of N and 1.2 to 1.5 million tons of P is similar to and supports the Fourth Plan targets. The sale of 4.0 to 5.2 million tons N and 2.0 to 2.6 million tons P was projected for 1978/79. These numbers may be compared with sales of 1.2 million tons N and 0.4 million tons P in 1968/69. The projections exceed probable domestic production by 0.5 to 0.9 million tons of each nutrient each year during the decade; this amount would need to be imported. These projections are sensitive to assumptions regarding a continued increase in the use of HYV seeds, added irrigated area and favorable cost-price relation- ships. The projections for P based as they are on an assumed ratio of 2 N to 1 P are subject to a wider range of estimating error. State and district projections are more sensitive than the national projections to changes in the assumptions and weights used. ii. Projections were based on a close examination of the factors that influenced changes in sales during the ten years up to 1968/69. During this period demand was influenced most by the cultivator's previous experience from the use of fertilizers (the learning process) and the area irrigated and planted to selected crops known to have consumed most of this material. These factors explained 70 to 90 percent of the changes in demand. Other factors, not measurable with the available data and assumed to be important, included the availability and use of agricultural credit, market and transport facilities and promotional efforts. iii. The above factors were used to project demand for N plus P for each district, after making appropriate assumptions regarding changes in their growth rates. Inherent in these assumptions were the investments needed and time required to expand irrigation resources, develop and adopt new techno- logies, increase the availability of agricultural power-and expand the agri- cultural input and commodity marketing systems. It was assumed that cost/ benefit relationships would be about the same as observed during 1967 to 1969. In some districts assumptions included improvements in agricultural credit and transportation resources. iv. For this study, time series agricultural data for each district were assembled. It is suggested that these data be up-dated each year and supple- mented by additional information as needed to continue the study of demand for fertilizers. Factors such as multiple cropping and application of ferti- lizers to crops not usually fertilized would change the values of independent variables in the future. Particularly, a technological break-through in respect to paddy, pulses, oilseeds and cotton among the specified crops would change the projections, as the past influence for some of these crops on ferti- lizer demand had been low or insignificant. The dry farming program is yet another area which would make a difference in future demand. Further studies should concentrate on the farm business unit to determine the factors influencin6 the cultivator's expenditure for fertilizers. Also the role of agricultural credit, market facilities, promotion activities, and transportation resources may be delineated. Assemblying and analyzing the data each year would provide guidance in achieving fertilizer targets and plan objectives and would be most rewarding for the future of Indian agriculture.   Chapter I - INTRODUCTION 1.01 The role of fertilizers as an important input needed to achieve increased agricultural production has been fully established and accepted. Growth in agricultural output depends largely on the quantities of fertili- zers used with each crop in combination with water from irrigation and rainfall, seed, and other inputs. 1.02 Capital investment in India's fertilizer industry exceeded Rs. 5600 million ($ 750 million) in. 1969. Capital required for the proposed expansion of the industry over the next five to ten years exceeds this amount. In- vestors in the industry are concerned about the probable demand for the nation and also for each market region served by each factory engaged in the manufacture and sale of fertilizer materials. The returns to capital invested in each factory and the industry are substantially reduced if ferti- lizers are produced and marketed below about 80 percent of plant capacity. 1.03 Using a pragmatic approach, this study projects demand for fertili- zers, district by district, and year by year to 1973-74 and then for 1978-79. Government and fertilizer industry planners and investors would be the major users of these projections. In the 10 years ending with 1968-69, sales of nitrogen (N) had expanded at 27 percent per year while sales of phosphate (P) had expanded at 31 percent per year. In this study some of the factors that influenced these changes have been identified, weighted and used to estimate future sales. The study of demand for potash fertilizer haB not been included because of inadequate data. 1.04 This chapter summarizes fertilizer dmand studies and projections of other investigators. Characteristics of demand are reliewed in chapter II. Methods used to project demand for N and P are explained and three projections are given in chapter III. The implications of these results for development planners and investors are given in chapter IV. The annexes contain detailed information regarding the data collected, details of district-wise sales of N and P from 1959-60 through 1968-69 and district projections through 1973-74. Results of Earlier Investigations 1.05 Investigations of demand for fertilizers y districts, States or regions in India have been made by others. Donahue!/in 1966 projected expected district demand for 1970-71 on the basis of area in each crop and the proportion of the recommeqoed application rate it was anticipated that cultivators would use. Brown- in 1965 estimated fertilizer demand by dis- 1/Donahue, R. 0. Fertilizer EBxpected to be Used in India in 1970-71 by Districts, Crops and Regions as of April 1, 1966. The Ford Foundation, New Delhi, April 1, 1966. 2 Brown, D. D. Estimates of Fertilizer Demand for India. The Ford Foundation, New Delhi, April 1, 965.  -2- tricts and years to 1970-71 by the use of a trend extension technique ad- justed for ad hoc judgement of probable changes in irrigated area, crop pattern and crops response. Demand in recent years was considerably above Brown's estimates and considerably below Donahue's. The effect on demand of the upwiard shift in crop response resulting from the introduction of new crop varieties, the increase in irrigated area and the rapid increase in commodity prices were under-estimated by Brown and overestimated by Donahue. 1.06 Desai 3/Jin 1969 projected demand for nitrogen fertilizer by the use of a two step model that included area under each crop and the rate of application per unit of area in each crop. Two rates of application were assumed; the first based on observed rates for each crop in each State, and the second based on the use of nitrogen at near the economic optimum rate. As background for this approach Desai used survey data to analyze factors influencing fertilizer use by cultivators. His cost-benefit proxy was the ratio of the weighted average price of nitrogen in each State in the current year to the weighted average price of crops for the previous year. In general, his approach was based on the diffusion rate of growxth in demand as reflected by the historical experience before the introduction of the more responsive varieties of wheat and other cereal crops. 1.07 &Tell g in 1969 estimated the amount of fertilizers needed to achieve alternative agricultural production targets by use of an additive model based on yardsticks of production of each input. To achieve a 24 million metric ton increase in foodgrains, the quantity of fertilizers re- quired was calculated as a residual after deducting added production as- sumed for the probable increase in area irrigated and area under high yielding variety crops. Varying rates of crop responses were assumed for each added unit of a mixture of four parts nitrogen, two parts phosphate and one part potash. The method did not consider the effect of inter- action of inputs or of changes in the rate of application of'fertilizer by cultivators in response to possible changes in costs, crop prices and other factors. 1.08 Donde V in his 1969 study which is summarized in Table 1.1, esti- mated the elasticity of demand for nitrogen fertilized at three levels of 2 Desai, G.M. Growth of Fertilizer Use in Indian Agriculture - Past Trends and Future Demand, Occasiornal Paper No. 2h, Cornell University, Ithaca, New York, USA - July, 1969. 4/ Ewell, R India's Fertilizer Reouirements during the 1970's. A Report to the Ministry uf Food, Agriculture, CoimauniLy Development and Cooperation, Government of India, New Delhi, The Ford Foundation, New Delhi, June, 1969. 5/ Donde, W.B. Market andc Real Prices of Fertilizers and Impact of Price Chanaes on Fertil`:-cr ConsiIxrntion and Production of Crops. Directorate of ;conomics and Statistics, llinistry of Food and Agriculture, Government of India, New Delhi, India, 1969. (Published in Agricultural Situation in India, Aug. 1970).  -3- Table 1 .1 - 07'ITIU1*i AND rECOiUl'qENDED Rt.TFS, COST-PRICE RATIOS AND }'RICE iQASIICITY OF DUi?LUND FOR N. Optimum PAtes l/ Recommended Rate 2/ Recornenc1ed Ralt Kgs N Cost-Price Elas- Kgs N Cost-Price Eias- Kgs N Cost- E1asti- Crop per ha Ratio tici- per ha Ratio tici- per ha Price city Kgs ty Kgs 2/ ty Ratio Kgs ty Kgs ../ ty Kgs Paddy HYV 142 3.17 0.28 100 6.51 0.81 50 10-55 2.62 Paddy Local 42 3.17 0.25 40 3.83 0.32 20 9.92 1.63 }"heat HYV Irr. 164 2.52 0.22 100 7.02 1.01 50 10.50 3.02 Wheat Local Irr. 52 2.52 0.14 48 4.16 0.25 24 12.57 1.-9 Wheat Local Not irr. 40 2.52 0.30 25 5.62 1.06 12 8.28 3.12 Maize HYV 256 3.50 0.54 100 7.42 2.97 50 8.67 6.93 Maize Local 50 3.50 0.20 142 6.27 0.43 21 13.62 l.C6 Bajra HYV 152 2.78 0.82 60 4-83 3.63 30 5.50 8.26 Bajra Local 45 2.78 0.29 30 5.99 0.96 15 9.11 2.52 Jowar Local 48 3.24 0.37 36 5.35 0.81 18 8.67 2.61 1/ Optimuim rates cf anDlication were calculated from the fortilizcr rpro6uc iden function giverl the market price of N (1969-70) and of the produce price (196U-69) 2/ As recommendcd by the Department of Agriculture. 3/ Kilograms of added crop output required to equate the cost of one Kg of N.  application per hectare for high yielding and local varieties of cereal crops under irrigated and unirrigated conditions. Donde assumed that demand for nitrogen fertilizer depends prinarily on the profitability of its use as determined by the crop's responsiveness, cost of fertilizer and other inputs and produce prices. These factors adjusted to the area and crop pattern determine sales in a district. The dimensions of these parameters change over time with the introduction and use of more fertilizer responsive crop varieties, improvement in farm management practices, the use of and interactions with other inputs, changes in relative prices and costs and the availability of fertilizers and credit. The study concludes that: Shifts in demand for nitrogen were relatively elastic to changes in real prices at the recommended and one-half recomrnmended rates of applying N; Cultivators in the early stages of adopting the use of fertilizer are more likely to respond to an increase in the cost-price relationship by not using any fertilizer. Likewise they are more likely to in- crease the use of fertilizer with a decrease in its cost relative to the price of foodgrains, or the introduction of more fertilizer responsive varieties; The calculated economic optimum, agronoinic recommended and one-half recommended rates of application per hectare for each crop as aiven in Table 1 are considerably above their recent average rates of application, indicating the probability of increased demarni for N under the conditions specified in the analysis. 1.09 In 1968, a committee of econg ists drawn from member companies of the Fertilizer Association of India_/ developed projections of demand for fertilizers up to 1973-74 by the use of four different methods. Their straight line projection represented the extension of the c-mpound growth rate in demand for nitrogen, phosphate and potassium for the five years, 1963-64 to 1967-68. The population-nutrition method of forecasting as- sumed a 2.5 percent per annum growth in population and a foodgrains re- quirement of 18 ounces per day per person. These data were used to de- termine targets for foodgrains and other commodities. A ratio ranging from 8.9 up to 13.5 kgs foodgrain output for each 1 kg of fertilizer input was used to estimate fertilizer requirements. A third projection was based on a crop area and recommended rate approach while their fourth projection was based on "needs" to achieve a 5 percent annual growth rate in agricul- tural production over the 1967i-68 base. The results of their study are given in Table 1.2. 6/ The Fertilizer Association of India. Report on the Development of the Fertilizer Industry During the Fourth Plan Period, August, 198.  -5- Table 1.2 - FOURTH PLAN PROJECTION OF DEMAND FOR FERTILIZERS IN MILLION TONS NUTRIENTS. 1969-70 1970-71 1971-72 1972-73 1973-74 Fertilizer Association Committee 1/ Straight Line Method N 1.54 1.98 2.55 3.28 4.22 P 0.63 0.88 1.21 1.68 2.32 K 0.25 0.33 0.44 0.58 0.77 Population Nutrition N 2.02 2.34 2.60 2.85 3.07 Basis p 1.01 1.17 1.30 1.42 1.53 K 0.50 0.59 0.65 0.71 0.77 Area Crop Approach N 1.92 2.36 2.80 3.23 3.68 P 1.03 1.32 1.61 1.19 2.20 K 0.68 0.93 1.18 1.42 1.67 Needs - Agr. Growth N 1.90 2.34 2.77 3.16 3.54 Rate P 0.95 1.17 1.38 1.58 1.77 K 0.47 0.59 0.69 0.79 o.88 gorkin Group N 1.70 2.00 2.78 3.22 3.73 Fourth Pc - nP 0.60 0.80 1.20 1.44 1.74 K 0.30 0.40 0.82 0.95 1.11 Sources: 1/ Report on,the Development of the Fertilizer Industry During the Fourth Plan' Period. The Fertilizer Association of India, New Delhi, Augutst 1968. 2/ Working Group Report on Fourth Plan. Fertilizer Requirements, Governmentfof.-India, Ministry of Food, Agriculture, Cooperation and Panchayat Raj, New Delhi, 1968.  - 6 - 1.10 Targets for fertilizer use as ported in the Fourth Plan7/were calculated by a Fertilizer Working Group within the Ministry of Food and Agriculture. The committee estimated the future requirements of fertilizers by taking into consideration the probable area under each crop, the most probable rates of nutrient application for the various crops and the per- centage of the area likely to be covered by fertilizer applications. The rate of fertilizer application per hectare for various crops, both under irrigated and unirrigated conditions, were based on fertilizer recommen- dations, the scientific data wailable, probable developments in research, and an assumed rate of acceptance by cultivators. The requirements of fertilizers based on these considerations were estimated at 3.73 million tons of nitrogen, 1.74 million tons of phosphate and 1.11 million tons of potassium in 1973-74. In arriving at this requirement, the area under high yielding varieties was assumed to be 24.30 million hectares on which 160 kgs of NPK nutrients per hectare would be applied. All the area in irrigated cereal and oilseed crops would be fertilized and in the case of other irrigated crops, 75 percent of the area under pulses, sugarcane and cotton and 50 percent of the area under the remaining crops would also receive ferti- lizer. In the case of unirrigated crops, the area assumed to be covered by fertilizer application was 40 percent for cereals, 50 percent for sugarcane and cotton, 25 percent for pulses, 30 percent for oilseeds and 70 percent for jute. Their projections are also given in Table 1.2. 1.11 It should be clear that most of these projections are based on "need" or "requirement" to achieve production targets. Except for Desai's proxy fertilizer cost-crop harvest price ratio and Donde's fertilizer cost cereal grain price elasticities very little in the realm of economics of demand for fertilizers has been investigated. Fertilizer industry marketers are interested in the "needs" type of projection. However, the economic viability of a fertilizer factory or of the industry depends on market demand. A clearer understanding of the factors that influence market demand would help improve the accuracy of market forecasts and serve as a useful analytical tool. - Fourth Five Year Plan 1969-74. Planning Commission, Government of India, 1ew Denth. -/Working Group Report on.,Fourth Plan. Fertilizer-Requirements, Government of India, Ministry of Food and Agriculture, New Delhi, 1968.  -7 Chapter 2 - CHARACTERISTICS OF DEMAND FOR FERTILIZERS 2.01 The demand for fertilizer, measured as its application per hectare or as the aggregate tons consumed in a igion, advances over time at alternating low and high rates of gain, a net decrease in demand is seldom observed for any extended time. These alternating rapid and less rapid increases in demand have been observed in a number of countries. In India overall consumption of fertil- izers moved from 170,000 tons of N plus P in 1959 to 690,000 tons in 1965. Consumption then increased to over 2.0 million tons by 1970-71. Slower rates of increase then set in when additions to the area irrigated and the adoption of new technology slowed down in response to changes in economic gains from the use of more fertilizers. 2.02 Shifts in demand are believed to be associated with shifts in costs and benefits of farming. Costs of farming may change asa result of adjustments in the combination of inputs sauch as the introduction of more fertilizer responsive varieties, added irrigation resources, new technologies in the fertilizer industry that reduce the cost of fertilizers, improvements in the managerial skills of the cultivator and other factors like credit, availability cf supplies, markets and transport facilities. Benefits may shift because of changes in yield and crop prices, adjustments in cropping pattern, reduotion in the cost of inputs, and other factors. Factors that improve cost-benefit relation- ships tend to get concentrated in a consecutive span of years during which cultivators increase their use of fertilizers in an attempt to readjust to a shift in the economic optimum rate of application. Eventually the impact of these factors stabilizes as equilibrium is approached and the growth in demand for fertilizers is at a slower pace. 2.03 For the purpose of thisstudy all available and relevant data were assembled, district by district, for the 1959-60 to 1968-69 years. Data available and their sources are indicated below. Annex 1 gives a more detailed description of each i-tem and the methods used to compile the ten-year time series used. 1. Net consumption of nitrogen and phosphate fertilizers State Department of Agriculture 2. Area, 30 crops Directorate of Economics and Statistics Ministry of Food, Agr. C.D. & Cooperation 3. Production, 30 crops It " I It 4. Irrigated area, 30 crops " " " I " " 5. District harvest prices, 30 crops " " " " " " 6. 50 years' (1901-1950) average rain- fall for 4 seasons and the mean an- nual average with their coeflcients of variability Meteorological Office, Poona 7. Crop response data ICAR and State Government Model Agronomic Experiments and IARS field crop cutting data in IADP districts.  -8- Information regarding changes in the use of agricultural credit, rural transportation, extension service and other factors believed to influence demand for fertilizers were not available on a district time- series basis. 2.04 The data for items 1 to 6, were assembled and computerized for a ten-year time series (1959-60 to 1968-69) for 271 districts in the following States: Andhra Pradesh Madhya Pradesh Rajasthan Bihar Maharashtra Tamil Nadu Oujarat Mysore Uttar Pradesh Haryana Orissa West Bengal Kerala Punjab For the States of Assam, Himachel Pradesh and JammNu-Kashmir, data were available for only a part of the ten-year series. The districts in these States were omitted frao the regression analysis. Annex 2, TablesI to X=X lists the detailed data regarding fertilizers used in each district. Data showing crop response to fertilizers were not available for the complete ten-year time series for any district. The details of response data were also not comparable over time and not available for all the crops. Under the circumstances, crop response data for a few districts and some crops were assembled and processed to examine their usefulness for analyzing the character- istics of fertilizer demand and for projecting demand in these districts. Fertilizer Consumption in Indian Districts, 1959-60 - 1968-69. 2.05 In 1968-69, less than 2.5 kgs of N plus P per hectare of gross crop land were used in 94 of 290 districts for which these data were assembled. The volume of consumption in these districts formed about 3 percent of the total amount of N and P used. The same group of districts had used 5.2 percent of the total N and 6.3 percent of the total P in 1959-60. The growth in the consumption of fertilizer in these districts was considerably lower than the average growth in the ten-year period in the country as a whole. At the other extreme 47 districts, where more than 22.5 kgs of N plus P were used per hectare in 1968- 69, consumed 46.5 percent of the N and 48.8 percent of the P. These districts had a higher rate of application in 1959-60 and increased this rate more rapidly than the average increase in the use of fertilizers in all the districts. 2.06 The N-P balance shifted from 3.7 N to 1.0 P in 1959-60 to 2.8 N to 1.0 P in 1968-69. The recormended ratio is about 2.0 N to 1.0 P. Beginning at a lower level of use, the demand for P increased more rapidly than for N. The frequency distribution of districts by fertilizer consumption per hectare of gross cropped area in 1959-60 and 1968-69 is given in Table 2.1. 2.07 The location of districts py the rate of application of fertilizers per hectare and changes in this rate lead to these general Dnclusions: a) Districts with a low rate of application in 1959-60 and also a low rate in 1968-69 were located mostly in rainfall belts of less than 20 inches or more than 45 inches per year and with less than 10 percent of the gross crop area irrigated. The --dropping pattern concenraited on jowar, bajra, ragi, millets, pplses and cotton in the low rainfall districts; and on paddy in the high rainfall districts.  Table 2.1 Frequency Distribution of Districts by Amount of N plus P Consumed per Hectare of Gross Crop Land-in 1968-69 and Amount of Fertilizer Used No. of Kgs. N+P Used Amount Used in 1959-60 Amount Used in 1968-69 dis- per Hectare Gross tricts Crop Area in 1968-69 Nitrogen Phosphate Proportion N etrogn Phosphate Proportion Tons %of Tons of N to P Tons % of Tons of N to P total total total total 55 Under 1.00 1410 1.0 399 1.0 3.5 - 1 10531 0.9 5214 1.3 2.0 - 1 39 1.00 to 2.49 5797 4.2 1954 5.3 3.0 - 1 24957 2.2 7931 2.0 3.1 - 1 63 2.5 to 7.49 19304 14.1 3480 9.4 5.5 - 1 141762 12.5 40817 10.2 3.5 - 1 40 7.5 to 12.49 24349 17.8 3666 9.9 6.6- 1 137038 12.1 41649 10.4 3.3- 1 22 12.5 to 17.49 11610 8.5 3509 9.5 3.3 - 1 98788 8.7 42943 10.8 2-3 - 1 24 17.5 to 22. 49 18270- 13.4 4143 11.2 4.4 - 1 191284 16.9 65351 16.4 2.9 - 1 11 22.5 to 27.49 10877 8.0 2482 6.7 4.4 - 1 85987 7.6 40454 10.1 2.1 - 1 8 27.5 to 32.49 9572 7.0 3000 8.1 3.2 - 1 77909 6.9 24510 6.1 3.2 - 1 9 32.5 to 37.49 7061 5.2 524 1.4 13.5 - 1 99527 8.8 28609 7.2 3.5 - 1 10 37.5 to 50.0 9377 6.9 4928 13.3 1.9 - 1 102358 9.0 42489 10.6 2.4 - 1 9 Over 50 19039 13.9 8910 24.1 2.1 - 1 160960 14.2 59174 14.8 2.7 - 1 290 Total: 136666 37003 3.7 - 1 1131101 399141 2.8 - 1  - 10 - b) Districts that used fertilizers at low rates in 1959-60 and high rates in 1968-69 were generally located in the 25 to 45 inch rainbelt and a substantial proportion of the cropped land was irrigated. Crop patterns were usually wheat or paddy and one or more cash crops of jowar and baJra plus cotton. c) Rates of fertilizers application per hectare tended to fit known soil types, weather characteristics, water resources, crop patterns and flow of cost-reducing technologies. Factors such as the agrioultural and marketing resources appeared to be available in greater quantity in the districts with the higher rates of fertilizer application. Parameters of Fertilizer Demand 2.08 Economic theory provides the hypothesis that demand for fertilizers, given the time to achieve equilibrium, would be at that level of use where the cost of the last unit of fertilizer applied on a farm unit would equal the value of added output. This study did not include the collection and analysis of data from representative farm opeining units in each district needed to test this hypothesis. However, an attempt was made to test it with the help of the crop response and IADP crop cutting data described in para- graph 2.03. 2.09 The economic