Fertilizer oligopoly threatens global food production, hurting profits

Molotov cocktail from war in Ukraine and climate change they created farmland to exacerbate the food crisis. Restrictions on the export of grain and fertilizers or their blockade on the territory of Ukraine exacerbate the humanitarian drama in the countries of Africa or the Middle East, where food shortage and price increases were a serious problem even before the start of the war in Ukraine. But on the other side big nine oligopolies will increase their profits this year by about 57 billion euros, five times more than before the war, according to the European Climate Fund's report The Fertilizer Trap: The Rising Costs of Agriculture's Dependence on Chemical fertilizers.

"While many people involved in agriculture are struggling to cope with rising prices, the world's largest fertilizer companies are achieving record profits," the document says, highlighting that it is all turning into great pressure on farmers and for national budgets. The rapid rise in prices for these substances puts global food production under control . The UN itself warned last month that it was critical to lower the cost of inputs such as potash or nitrogen fertilizers to avert an even greater humanitarian catastrophe.

Over the past 70 years, the global use of chemical fertilizers has increased tenfold. According to industry representatives, this has contributed to increased food security and increased access to food for millions of people around the world. The downside is that chemical fertilizers They are one of the main causes of climate change. causing soil degradation and water and air pollution. According to the cited report, they account for 1 out of every 40 tons of global greenhouse gas emissions.

"The era of cheap chemical fertilizers has come to an end. Governments must end corporate speculation, stop the overuse of chemical fertilizers, increase the production of organic alternatives, and redirect public spending towards agroecological farming practices which cause less damage than chemical fertilizers," says Sophie Murphy, executive director of the Institute for Agricultural and Trade Policy (IATP).

Lack of transparency in the industry combined with the high cost of gas and the blockade of Ukraine and Russia, two of the world's largest producers, led to exorbitant price of these issues faced by the most vulnerable. Four companies, Nutrien, Yara, CF Industries and Mosaic, control a third of all nitrogen fertilizers and dominate an empire worth more than 200,000 million euros, the document says.

The historic cost of food is out of reach for millions of people at risk of poverty, many of whom depend on agriculture shaken by the effects of climate change and reduced crop production. If you follow this trend, production in Africa could fall by 20% . In countries such as Zambia, high fertilizer prices have been a key factor in causing food prices to spike above 300%.

Help for fertilizer producers

G20 countries They paid 288% more this 2022 mineral fertilizers compared to 2020. The development of a strategy to deal with this crisis will, in fact, be one of the key items on the agenda of the twenty leaders of the world's leading economies, which will meet next week in Indonesia . The trend in the face of this acute polycrisis is to support companies in the sector with subsidies to increase production. "Farmers are in big trouble while the big fertilizer companies line their pockets. Governments should stop using public money subsidize chemical fertilizers and support the transition to agroecological practices that benefit farmers, consumers and the planet," warns David Calleb Otieno of the Kenya Farmers League.

The European Commission is expected to present a new roadmap this week to address fertilizer crisis throughout most of the Union. During the last meeting of the EU Council on this issue, Commissioner for Agriculture Janusz Wojciechowski announced that the message from the community executive would be to support fertilizer producers with the aim "the EU will not lose this sector" and avoid dependence on third countries . According to statements the Pole has made in recent months, the community's strategy will be to promote aid to fertilizer producers through measures such as transferring money from energy companies or removing tariffs on ammonia imports.