Oil and food prices are rising because of Russia’s invasion of Ukraine, and so are the prices of fertilizer.
Those increased prices could have dire effects including malnutrition, said a University of Guelph researcher.
Dr. Manish Raizada is a professor in the Department of Plant Agriculture in the Ontario Agricultural College. His lab focuses on developing low-cost technologies that reduce the need for synthetic nitrogen fertilizers and pesticides to grow corn and other crops, by replacing the products with more natural, biological resources.
“Farmers are buying fertilizer now,” he said. “Temporary subsidies on nitrogen fertilizer are needed now, so that the poorest farmers can afford to apply fertilizer at the start of the growing season. Without fertilizer, yields will collapse and families will be pushed into chronic malnutrition and further poverty.”
That’s a scenario reminiscent of gas and oil price increases in 2007-09, said Raizada. Then, about 150 million people were pushed into malnutrition.
“As fertilizer prices increase, farmers produce less, which affects both the supply of food and livelihoods,” he said, adding that for Canadian and American corn farmers the average profit margin is 1 cent per cob.
“Any increase in farming inputs reduces this marginal profit.”
Oil, gas and nitrogen
Nitrogen is the most common nutrient applied as fertilizer for cereal crops such as corn, rice and wheat. Its production, said Raizada, requires high heat from the burning of natural gas and oil.
“When oil and gas prices increase, nitrogen fertilizer prices increase,” he said.
Russia is the fourth-largest producer of nitrogen fertilizer, Raizada pointed out. Its invasion of Ukraine, along with Western sanctions against Russia, may have negatively affected supply, which further increases prices. The cost of transporting fertilizer is also a contributing factor.
As for Ukraine, it is “one of the world’s largest wheat producers and exporters,” he said. Only a fraction of global wheat is exported, and so “any disruption can have a dramatic effect on wheat commodity prices.”
That makes it “critical in the coming months for governments around the world to subsidize the price of fertilizers,” he said, adding that temporary subsidies on nitrogen fertilizers are needed now to ensure income for farmer households and global food security.
Recently, Raizada discussed the consequences of rising fertilizer prices with Yahoo! Finance. He is available for interviews.
Dr. Manish Raizada