Fertilizer factor fuels global food crisis – POLITICO

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A global fertilizer crunch is threatening to further starve a planet that’s already going hungry.

Officials at the United Nations and beyond are stepping up warnings about the mounting crisis for fertilizers — an essential substance to boost soil fertility — as vulnerable countries in places like Africa grapple with prices that have soared by 300 percent since Russia’s war in Ukraine began.

The continent, where smallholder farmers feed the majority of people, is already lacking 2 million metric tons of fertilizer, according to the African Development Bank. The high price of fertilizers will mean less food at a time when people need it most, with more frequent bouts of extreme weather and the Ukraine war still leaving import-dependent countries insecure. Farmers in Europe are feeling similar strains, though to a lesser degree.

“We are really starting to yell from every tower that there’s a fertilizer crisis … and the fertilizer crisis is enormous,” said one U.N. official who spoke on the condition of anonymity.

The African Development Bank said in May that “many African countries have already seen price hikes in bread and other food items,” warning that “if this deficit is not made up, food production in Africa will decline by at least 20% and the continent could lose over $11 billion in food production value.”

But David Beasley, executive director of the U.N. World Food Programme, said he thought that 20 percent estimate “could be very low.”

“[There’s] 980 million people inside Africa that depend on the smallholder farms and the fertilizer to reach them, and we’re working on these issues as we speak,” Beasley told the U.S. Congress last month.

Artificial fertilizers are made by using one of three primary ingredients: nitrogen, phosphorus or potassium. The final product is then spread over fields to provide crops with nutrients that are either missing or in short supply in the soil.

Making fertilizers is an energy-intensive process, especially for nitrogen-based fertilizers, which use natural gas as an essential ingredient. That means the price of fertilizers tends to correspond with energy costs.

“The increased price is [a] burden for all farmers in the world, but the burden is even higher for those farmers in developing countries that have less financial capacities and organisation to purchase the fertilisers than the European ones,” an EU official wrote to POLITICO.

Moscow’s role

Fertilizer prices were high even before Russia invaded Ukraine, which prompted a further 50 percent spike, according to the European Commission.

The war in Ukraine has exacerbated the problem because of Russia’s outsized role in the world fertilizer market. It’s the world’s top exporter of nitrogen fertilizers, the second largest supplier of potassium and the third-largest exporter of phosphorus fertilizers. 

Since its invasion of Ukraine in February, shipping costs and energy prices have gone up. Europe’s fertilizer producers now warn of shortages if the Continent’s imports of natural gas from Russia continue to fall.

“It’s a big attention point,” a second EU official said. “Apart from very challenging weather conditions we have in Europe, the fertilizer costs will be a very important element in terms of what will be cultivated around the world, in Europe and Ukraine in particular.”

And EU sanctions against Moscow have snarled the fertilizer trade further. The bloc limited imports of potash — a chemical used to make fertilizer — and other combined fertilizers from Russia and Belarus. Even though it insists that those sanctions don’t limit Russia from exporting elsewhere, it’s already made it difficult for other countries to buy Russian fertilizers since Russia got kicked out of the SWIFT international payments system and insurance costs for ships rose sharply as well.

For its part, Russia has limited fertilizer exports, arguing the move was to protect its own farmers, even as some countries like Brazil and India continue to receive Russian agrichemicals. The restrictions are in place at least until the end of the year.

“Many uncertainties remain, including high fertilizer prices that can impact future production prospects and farmers’ livelihoods,” Máximo Torero, the chief economist at the U.N.’s Food and Agriculture Organization, said last week. He also said a “bleak global economic outlook” poses “serious strains” for world food security.

Tough trade-offs

High fertilizer prices have also upset the delicate balance between ensuring that farmers get paid well enough for their produce while food is affordable enough for consumers. If fertilizer prices remain high because of high energy costs, then farmers of crops like wheat will struggle to cover their costs and food prices will rise even more, extending the hunger crisis.

High energy costs have already been disrupting the production of fertilizers in Europe. Norwegian giant Yara delivered 22 percent less fertilizer to farmers in the second quarter of 2022 because of high prices.

“There is a clear risk of nitrogen shortages and further price spikes if the gas situation in Europe deteriorates further,” Yara CEO Svein Tore Holsether said last month.

Ahead of a winter when Russia may well entirely switch off the EU’s natural gas supply, Brussels has said that governments should prioritize supplying gas to “societally critical” industries like food production.

But the answer to the crisis isn’t simply to produce more fertilizers, according to some experts, especially since overuse can lead to environmental degradation. Many of the nutrients for crops end up in waterways and can upset fragile ecosystems and wipe out aquatic life.

The EU’s Green Deal chief Frans Timmermans has said the EU should use the wartime imperative to become independent from Russian energy, and lean into its goal to limit the overuse of fertilizers by adopting more environmentally-friendly agricultural practices.

Across Africa, farmers have been made particularly vulnerable to the crisis by decades of policies designed to promote the use of artificial fertilizers instead of more resilient farming methods they had been practicing for generations, according to Million Belay from the Alliance for Food Sovereignty in Africa. 

Even in countries like Morocco and Egypt, both leading chemical fertilizer producers, high prices have taken their toll on the poorest of farmers.

“For farmers who have been led down the path of applying more and more chemical fertilizers on their soil, this is a real crisis,” Belay said.

He added that for places like North Africa, “it is going to be a disaster.”

Sarah Anne Aarup contributed reporting.

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