Rashtriya Chemicals and Fertilizers Ltd has been accused of using coercive tactics such as 'product tying' or 'tagging' to force farmers to purchase higher-than-necessary quantities of fertilisers.
Maharashtra-based farmers’ organisation Shetkari Sanghatana has lodged an anti-trust complaint with the Competition Commission of India (CCI) against Rashtriya Chemicals and Fertilizers Ltd (RCF), accusing the state-run company of abusing its dominant market position.
The complaint, lodged by Shetkari Sanghatana President Raghunath Patil, accuses RCF of coercing farmers and fertiliser dealers into purchasing additional products alongside urea, a heavily subsidised and regulated essential agricultural input. This practice, known as ‘product tying’ or ‘tagging’, has raised concerns about anti-competitive behaviour and unfair market restrictions.
If proven, the allegations could have far-reaching implications for India’s fertiliser industry and the regulatory framework governing it.
According to farmers and local retailers consulted by the union, RCF distributors have been pressuring buyers to accept additional products as a prerequisite for receiving urea. Many farmers, already struggling with high input costs, have found themselves compelled to purchase fertilisers they do not need or cannot afford.
“Before taking the matter to the CCI, we spoke to local retailers who confirmed that they were being forced to buy non-urea products in order to receive chemical fertilisers for distribution. When we approached the companies, they claimed that these additional products were meant to improve soil health and promote balanced fertiliser usage in line with government objectives,”
said Raghunath Patil.
The complaint further alleges that despite warnings from various government agencies, RCF has continued to engage in these sales practices. In 2022, the Ministry of Chemicals and Fertilisers raised concerns about forced bundling, and several state governments, including Maharashtra and Punjab, issued notices against such practices. However, an internal meeting of fertiliser manufacturers in mid-2024 reportedly acknowledged ongoing complaints from dealers, indicating that the issue had not been resolved.
RCF, a key player in the fertiliser sector, holds a 75 per cent government stake and was recently awarded ‘Navratna’ status, granting it greater financial and operational autonomy. The company plays a major role in Maharashtra’s agricultural supply chain, providing over 40 per cent of the state’s urea requirements.
By invoking Sections 3 and 4 of the Competition Act, 2002, which prohibit anti-competitive agreements and the abuse of market dominance, the farmers’ union hopes to trigger an investigation into RCF’s business practices. If the CCI finds merit in the allegations, the company could face penalties or be required to change its sales policies.
Source: Business Standard
