In the face of rising fertiliser prices and restricted supply as a result of the ongoing Middle East crisis, the European Commission has presented its Fertiliser Action Plan which aims to support farmers and reduce Europe’s dependency on imports. The Commission says that its plan “will directly help ensure food security and reinforce Europe’s strategic autonomy, while pursuing high climate and environmental goals.”
Recent supply disruptions and price volatility have put farmers across Europe under increasing pressure, exposing Europe’s vulnerability to external shocks in fertiliser supply; around 30% of the world's fertiliser products pass through the currently-closed Strait of Hormuz. The Commission is concerned that, with the next sowing season approaching, rising fertiliser costs could force farmers to use less fertiliser or cut back on the scale of their planting, both which would threaten crop yields and food production. And as much of the production of fertilisers is based on imported fossil-fuel feed stocks, there's also a recognition that Europe needs to build a more sustainable domestic supply, too.
The EC's plan is a combination of measures aimed at supporting affordability and security of supply with longer-term actions intended to strengthen domestic fertiliser production, improve supply resilience and accelerate the transition to bio-based, low-carbon and circular fertilisers.
“With the Action Plan, we are investing in a stronger European fertiliser industry, supporting European farmers and accelerating innovation in sustainable, home-grown solutions,” said President of the European Commission Ursula von der Leyen. “The ongoing fossil fuel crisis shows that climate leadership and economic resilience are interlinked."
This development comes as the United Nations Food and Agriculture Organization (FAO) is warning that the closure of the Strait of Hormuz “is not a temporary shipping disruption but the beginning of a systemic agrifood shock that could trigger a severe global food crisis within six to twelve months.”
To help mitigate the looming crisis the FAO has proposed a series of policy recommendations which it says are aimed at dealing with the situation around the restrictions to shipping in the Strait of Hormuz.
Short-term recommendations include promotion of interventions to cut nitrogenous fertiliser use, while medium-term recommendations include support to avoid increased biofuel demand during the shortages to limit food–fuel competition. Long-term recommendations include development of innovation funds to support green ammonia, bio-stimulants, crop genetics and nutrient-efficiency technologies. This last recommendation could take three to five years, but it would significantly strengthen long-term resilience, the FAO added.
The FAO stresses that “the window for preventative action is closing quickly.” The impact is already visible, the FAO says, with its food price index, which tracks monthly changes in the international prices of a basket of globally traded food commodities, rising for the third consecutive month in April, driven by high energy costs and disruptions linked to the conflict in the Middle East.
“Decisions taken now by farmers and governments on fertiliser use, imports, financing and crop choices will determine whether a severe global food price crisis emerges,” the FAO said.
The FAO said the shock from the crisis is unfolding in stages, starting with energy, then fertilisers, seeds, lower yields, commodity price increases and then food inflation.
Director of the FAO's agrifood economics division David Laborde said that: “Mitigating these impacts will require shifting to alternative land and sea routes, including via the eastern Arabian Peninsula, western Saudi Arabia, and the Red Sea. However, these routes have limited capacity, making it critical to avoid export restrictions by major producers."
The FAO added that the situation could worsen with the onset of El Niño which is expected to bring droughts and disrupt rainfall and temperature patterns across several regions.
Further reading:
Visit Blog