Putin’s war should change the way the world farms


Food prices were already high before grain-producing Russia invaded wheat-exporting Ukraine, hampering Black Sea trade and triggering unprecedented financial sanctions. Rising fuel and commodity costs, at a time when government budgets are already under pressure, are now fraying spirits and straining alliances around the world.

Worse still, Russia is also a giant in the concentrated global fertilizer market. Although the sanctions have exclusions for food and crop nutrients, in practice export logistics have been disrupted, traders and banks fear they won’t follow the rules, and high gas prices have inflated production expenses. The end cost to farmers has been high: between April 2020 and March this year, fertilizer prices more than tripled – the biggest 23-month increase since 2008, according to the World Bank.

Everything is felt on the other side of the world. In Brazil – which imports more than 85% of its fertilizer, much of it from Russia – high costs and supply disruptions have led farmers to delay purchases, even as the soybean planting season is fast approaching. not. Prices are forcing farmers elsewhere to cut nutrients or leave fields fallow. In sub-Saharan Africa, researchers warn that nutrient use could drop by a third, affecting cereal yields.

Allied governments are working to ensure that excessive compliance with sanctions does not curtail authorized trade, while the Group of Seven, together with the World Bank, has set up a global alliance on food security, which aims to increase supply, remove trade barriers and add financial resources. Support. But any effective response must solve more than this emergency – it must prepare for the next one, investing in the sustainable and resilient supply of nutrients needed to feed the world.

For now, the world’s top priority should be to mitigate the immediate crisis and avoid major damage to the next harvest. That means pushing for states like China to remove barriers to fertilizer exports, with the help of the World Trade Organization. Allied nations should ensure that even the smallest traders and shipping lines can weather financial and other sanctions, providing clarity and so-called comfort letters as needed. Existing support programs for vulnerable exporters, such as the African Fertilizer Financing Mechanism, should be expanded. Fortunately, new supplies are also on the horizon: potash exporters in Canada and elsewhere are stepping up production, while Africa’s richest man has opened a urea plant in Nigeria.

Going forward, the world needs to increase supply while reducing the use of hydrocarbons in nitrogen fertilizer production. This will require a dramatic increase in wind and solar investments, especially in Africa. It will require increased energy efficiency in older installations. Soil test kits and national soil maps, like the system set up by the Ethiopian government, can help even smallholders adapt their use – and can make a significant difference in countries like China and the United States. India, where subsidies encourage poorly targeted application. Even a better understanding of residues left in the soil from the previous season can improve yields.

There is also ample room to increase investment in a chemical fertilizer industry that still relies on century-old technology. Slow-release fertilizers, for example, are less harmful to the climate and more effective than traditional fertilizers, reducing the amount farmers need to apply. In a study in Sri Lanka, rice yields increased even when only half the typical amount of nutrients was added. Better combinations of organic and chemical fertilizers could have a similar effect. Wider use of precision agriculture – in which farmers use an array of technologies to monitor crops, eliminate waste and increase productivity – could have profound benefits, especially in developing countries.

Ukraine has demonstrated that the global food supply is more precarious than many thought. It is a warning sign that the world cannot ignore.

More other writers at Bloomberg Opinion:

Food can be the ultimate weapon of the 21st century: Hal Brands

The world can still avoid famine: Leonid Bershidsky

GM crops are becoming the superheroes of agriculture: Amanda Little

The editors are members of the Bloomberg Opinion Editorial Board.

More stories like this are available at bloomberg.com/opinion

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