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Millions could starve as fertilizer prices soar

— Photo: Kiran Bakale

While the unprecedented price explosion has barely affected commercial farmers, it is leading to civil unrest among the small farmers in developing countries.

A global fertilizer crisis caused by high oil prices and the U.S. rush to biofuel crops is reducing the harvests of the world’s poorest farmers and could lead to millions more people going hungry, according to the U.N. and global food analysts. Optimism that soaring food commodity prices could lift millions of developing country farmers out of poverty and lead to more food being grown have been dashed, says the U.N.

A world fertilizer forecast report, due to be published by the U.N. this week but seen by the Guardian, states that prices will remain high for at least three years and possibly longer. Prices have mostly doubled and in some cases risen by 500 per cent in 15 months as U.S. farmers have rushed to plant more biofuel crops, and countries such as India and China have bought fertilizer stocks in large quantities to guarantee food stocks. But while the unprecedented price explosion has barely affected commercial farmers, it is leading to civil unrest among small farmers in developing countries. There have been fertilizer riots or demonstrations in Vietnam, India, Kenya, Nepal, Nigeria, Egypt, Pakistan and Taiwan in the past few months. Last week a man was killed in a stampede at a government handout of fertilizer in Hyderabad, India.

Dr. Jan Poulisse, senior U.N. Food and Agriculture Organisation analyst, warned that the poor were at risk. “High commodity prices allow commercial farmers in developed countries to cope with high fertilizer prices. But rising food prices hurt subsistence farmers, particularly in Africa,” Mr. Poulisse said.

“People just cannot afford [fertilizer]. They were in dire straits before but now the situation is worse.” Farmers in sub-Saharan Africa have been hardest hit because they have the least chance to benefit from soaring food prices, but desperately need fertilizers to replenish nutrient-depleted soils. Fertilizer prices have risen more than oil or any other commodities in the past 18 months. Of the three main types, diammonium phosphate (DAP) sold for $250 a tonne in January 2007 but has risen to $1,230. Potash-based fertilizers have risen from $172 to more than $500 a tonne, and nitrogen-based fertilizers have risen from $277 to more than $450 a tonne. Much of the price rise is attributed to farmers in the developed world who have applied high levels of fertilizers to maximise harvests of grain to take advantage of record grain prices, said Dr. Balu Bumb, policy leader at the International Centre for Soil Fertility and Agricultural Development in the U.S.

The U.N. fertiliser forecast blames capacity constraints for the price rises. “Strong global demand for fertilizers is stretching current production capacity to its technical limits. This situation will persist until new capacity comes on line,” it states. “It can take five to seven years to open a phosphate mine, 10 years fora potash mine and three years for a major nitrogen plant,” said Mr. Poulisse, one of the report’s authors.

At least 50 new plants to make nitrogen fertilizer are believed to be under construction, and phosphorous and potassium mines are being expanded. Fertilizer prices have been largely controlled by governments, but keeping prices down is impacting on other areas, such as education and health. India is expecting to spend $24bn supporting fertilizer prices this year compared with $4bn three years ago, and countries such as Malawi have had to borrow millions to introduce a fertilizer subsidy programme. However, the president of Malawi, Bingu wa Mutharika, admitted last week that the programme was failing the poor. “Sadly, it is the rich who are benefiting a great deal. They are selling maize to the poor at exorbitant prices,” he said.

Experts say the world has few alternatives to its dependence on fertiliser. As population increases and a rising global middle-class demands more food, fertiliser has become the preferred route to higher yields. Ann Barry, of Oxfam, called for a fundamental reform of the way agriculture is managed.

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