Transformation From Public to Private

Fertilizer industries in devebping countries have been established by the governments as different formToT parastatal enterprises, either fully administered by the respective ministries of industry or economy or public shareholding companies with the majority of the shares owned by the Treasury or other constitutional state owner. Establishment of the fertilizer industry by the state has created the economic climate in which this industry has been operating. Under such systems, the following elements of the operation have been regulated  

The lack of market forces impacting the production and distribution of fertilizer and other agricultural inputs has led initially to undesirable and economically faulty procedures and facts, including the following  

deregulation of fertilizer marketing and trade liberalization motivated public companies to further reduce production costs. A new network of private dealers and traders was established to compete with tiie state system. In several countries where divestiture and subsidy removal has been immediate, short-term fertilizer use and production declined significantly therefore, the whole system requires time for adji Btment and achievement of a new balance. 

The closure of a fertilizer plant should be considered only as an extreme case, when the costs of continuing production are higher than the cost of imported material, and other opportunities for investment show greater profitability. 

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