Friday, August 15, 2008

Poorest Farmers Hit by Rising Fertilizer Prices.

Fertilizer prices have doubles and in some cases increased five-fold, on which is blamed rising oil-prices and the U.S. effort to grow biofuel-crops in an effort to meet home fuel-demand. Large commercial farms are relatively buffered against the effect of rising fertilizer prices but in developing nations such as Vietnam, Pakistan, India, Kenya, Egypt and Taiwan, there have been riots over fertilizers. In Hyerabad, India, a man was stampeded to death last week in a rush to obtain government handouts of fertilizers.

There was some hope that rising commodity prices of food might help to lift farmers in developing nations from poverty, but because farmers consume their own crops and have no access to global markets, they are unable to benefit from rising global prices. To maintain their own food-supplies, fertilizers have been bought-up in large quantities leading to shortages and high prices.

In sub-Saharan Africa there is a pressing need to replenish soils that are depleted of nutrients, but the cost is too high. Countries like India and China have bought enormous quantities of fertilizers to preserve their own food-situation. There are three principal kinds of fertilizer: diammonium phosphate, potash and nitrogen-containing kinds, to yield respectively P, K and N to soils. In the past 18 months, diammonium phosphate has risen in price from $250 to £1,230 a tonne, potash from $172 to in excess of $500 a tonne and nitrogen-containing fertilizers from $277 to above $450 a tonne.

First world farmers are blamed for using large quantities of fertilizers to improve crop-yields to cash-in of the high grain prices that currently exist. There is an underpinning question of capacity too, in that it may take 5-7 years to get a phosphate mine open, 10 years for a potash mine and around 3 years to build a nitrogen-fixation plant. Hence the situation is not expected to be relived for several years. There is also the matter that a peak in world phosphorus will occur - at least in the form of phosphate-rock well before the end of the century.

According to experts on agricultural development, there is no alternative to using fertilizers in order to increase world food-production. I am once again reminded of the analysis of world population growth that I have referred to before which predicts that the human population will peak at around 7.1 billion by 2024, and then decline toward the end of the century.

This stands in contrast to other estimates that it will carry on increasing to over 9 billion by 2050, which I am beginning to doubt.

Related Reading.
"Soaring fertilizer prices threaten world's poorest farmers." By John Vidal

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