Putin’s War Should Change the Way the World Farms


Food prices were already lofty before grain-producing Russia invaded wheat-exporting Ukraine, hampering Black Sea trade and triggering unprecedented financial sanctions. The rising cost of fuel and staple goods, at a time when government budgets are already under strain, is now fraying tempers and straining alliances worldwide.

Making matters worse, Russia is also a giant in the concentrated global fertilizer market. Although sanctions have carve-outs for food and crop nutrients, in practice, export logistics have been disrupted, traders and banks fear running afoul of the rules, and high gas prices have inflated production expenses. The ultimate cost to farmers has been steep: Between April 2020 and March this year, fertilizer prices more than tripled — the sharpest 23-month increase since 2008, according to the World Bank.

It’s all being felt halfway across 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 nearing fast. Prices are forcing farmers elsewhere to cut back on nutrients or leave fields fallow. In sub-Saharan Africa, researchers warn the use of nutrients may shrink by a third, hitting cereal yields.

Allied governments are working to ensure overzealous compliance with sanctions isn’t curbing permitted trade, while the Group of Seven, with the World Bank, has set up a global alliance on food security, which aims to increase supply, remove trade barriers and add financial support. But any effective response must solve more than this emergency — it must prepare for the next, by investing in the sustainable and resilient supply of nutrients needed to feed the world.

For now, the world’s top priority should be to ease the immediate crunch and avoid significant damage to the next harvest. That means pushing for states such as China to remove barriers on fertilizer exports, with help from the World Trade Organization. Allied nations should ensure even smaller traders and shipping companies can navigate financial and other sanctions, providing clarity and so-called comfort letters as needed. Existing support programs for vulnerable exporters, such as the Africa Fertilizer Financing Mechanism, should be expanded. Fortunately, there is also some new supply 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.

Looking forward, the world needs to increase supply while reducing the use of hydrocarbons in nitrogen fertilizer production. That will require a dramatic boost in wind and solar investment, especially in Africa. It will demand increased energy efficiency in older facilities. Soil test kits and national soil maps, like the system built by the Ethiopian government, can help even smallholders tailor their use — and can make a significant difference in countries like China and India, where subsidies encourage poorly targeted application. Even a better understanding of residue left in the soil from the previous season can improve yields.

There’s also ample room to increase investment in a chemical fertilizer industry still leaning on century-old technology. Slow-release fertilizers, for instance, are less climate-damaging and more effective than the traditional kind, reducing the amount that farmers need to apply. In one study in Sri Lanka, rice yields increased even when only half the typical amount of nutrient was added. Better combinations of biological and chemical fertilizers could have a similar effect. Wider use of precision agriculture — in which farmers wield an array of technologies to monitor crops, eliminate waste and boost productivity — could have profound benefits, particularly in the developing world.

Ukraine has demonstrated that the global food supply is more precarious than many had thought. It’s a warning sign that the world can’t ignore.

More From Other Writers at Bloomberg Opinion:

Food May Be the Ultimate 21st-Century Weapon: Hal Brands

The World Can Still Avert Famine: Leonid Bershidsky

Genetically Modified 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 on bloomberg.com/opinion

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