Millions may starve as fertiliser prices soar

London, August 13:

A global fertiliser crisis caused by high oil prices and the US 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 UN 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 UN.

A world fertiliser forecast report, due to be published by the UN this week, 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 US farmers have rushed to plant more biofuel crops, and countries such as India and China have bought fertiliser 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 fertiliser 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 fertiliser in Hyderabad, India.

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

“People just cannot afford fertiliser. 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 fertilisers to replenish nutrient-depleted soils.

Fertiliser prices have risen more than oil or any other commoditiesin 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 fertilisers have risen from $172 to more than $500 a tonne, and nitrogen-based fertilisers 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 fertilisers 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 US.

The UN fertiliser forecast blames capacity constraints for the price rises. “Strong global demand for fertilisers 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 for a potash mine and three years for a major nitrogen plant,” said Poulisse, one of the report’s authors. At least 50 new plants to make nitrogen fertiliser are believed to be under construction, and phosphorous

and potassium mines are being expanded.

Fertiliser 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 $24 billion supporting fertiliser prices thisyear compared with $4 billion three years ago, and countries such as Malawi have had to borrow millions to introduce a fertiliser subsidy programme.

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 preferred route to higher yields. Ann Barry, of Oxfam, called for a fundamental reform of the way agriculture is managed.