Healthy soil and sustainable growing

["Tradingpost" <tradingpost@lobo.net>]

New threat to food system: pricey fertilizer
Tue Jun 10, 2008 10:11am EDT
http://www.reuters.com/article/newsOne/idUSN2032488920080610

WASHINGTON/WINNIPEG (Reuters) - It powered the Green Revolution and helped 
save millions from starvation, but now one of the most important tools on the 
farm is being priced out of reach for many of the world's growers.

With food prices soaring and stocks thinning, the world is in need of bumper 
harvests but once one of most bountiful of commodities, fertilizer, is 
becoming scarce and expensive.

It's estimated that one third of the protein consumed by humans is a result 
of fertilizer. So high prices and spot shortages are yet another stress on 
the world's ailing food system.

"You can't really expect a bigger harvest if you will not use fertilizer, but 
the cost is killing us," rice farmer Jaime Tadeo in the Philippines told 
Reuters, adding that a bag of fertilizer now sells for nearly 1,800 pesos, or 
$43, up from less than 1,000 pesos a year ago.

"It's totally out of our control because if prices of oil continue to shoot 
up, the prices of fertilizers will also increase. I am afraid, many of us 
would not be able to afford it."

Fertilizers are like vitamins for soil and consists of three main types, 
nitrogen, potash and phosphate.

Because some fertilizers such as nitrogen require energy to produce they 
track energy prices. But other kinds are just in high demand, even though 
experts say the shortages are not due to a lack of supply.

Last month China agreed to pay more than triple what they did a year ago to 
get hold of tight supplies of potash, sending the shares of global fertilizer 
makers to record levels.

China, the world's biggest import market for the nutrient, will pay $650 to 
$670 a metric ton for the product, analysts estimated.

"With the intense pressure on global food production and continued growth in 
potash demand, this is the reality for our industry for the foreseeable 
future," said Bill Doyle, chief executive of Canada's Potash Corp, the 
world's top producer.

The rising price is a burden on rich and poor farmers alike as they represent 
a big investment upfront, despite high world prices for crops. If all goes 
well, a farmer can earn $3 for every $1 invested in fertilizer.

"We're all hoping Mother Nature cooperates and we can fill the bins, because 
...we've got a lot on the line," said Robert McLean, a farmer in Canada's 
grain belt as he hauled a tractor-trailer load of canola harvested last fall.

Phosphate prices are up 50 percent over last year at C$570 per metric ton 
when McLean, who grows wheat, barley and canola in south-central Manitoba, 
booked supplies in January.

Farmers who waited to buy until spring have had to cough up as much as 
C$1,230 per metric ton, McLean said.

"We were hearing reports it was going to go up quite a bit. Nobody envisioned 
that it would go up 100 percent. It's just god-awful ugly, I think is a good 
way to express it,"

With enough rain and heat, fertilizer will help farmers reap historically 
high grain prices. But poor yields would leave them struggling to pay for 
next year's supplies.

GREEN REVOLUTION

Fertilizers were seen crucial in the Green Revolution of the past few decades 
where farmers, especially in poor countries, were able to dramatically 
increase crop yields.

The Green Revolution took root in the 1940s and newly developed inorganic 
fertilizers -- leaving rudimentary additives such as manure in the dust -- 
helped spark an explosion in food production, and saved countries such a 
India from famine.

World fertilizer use grew more than 11 times from a mere 14.5 million metric 
ton in 1950 to 169.4 million in 2007, while population ballooned from 2.5 
billion to 6.6 billion.

But now with high fertilizer and fuel prices, some worry many of the gains 
could unravel, putting strain on all farmers but especially in the developing 
world.

"This has been a significant problem for the low income farmer," said Rajiv 
Shah, who manages the agriculture development program at the Bill and Melinda 
Gates Foundation, which has extensive aid programs in Africa.

He said fertilizer use has long been a challenge in Africa, where farmers use 
about one tenth of what is applied by American farmers.

But now the problems are worsening with farmers forced to use fertilizers 
even more sparingly. They are also facing shortages and dealing with 
unscrupulous dealers selling poor quality products. All in all they have a 
lot on the line this season.

"If it doesn't rain that year, you can lose your entire crop and your family 
will struggle to get enough to eat," Shah said in a telephone interview.

In the sultry, sprawling palm oil plantations of Malaysia, which produces one 
of the developing world's most important cooking oils, shortages of 
fertilizers are already being felt.

"The fertilizer shortage is a huge problem," said Martin Bek-Nielsen of 
United Plantations, who sees it as inevitable that some farmers will have to 
cut back.

"Most plantations will not cut back, but small holders who have limited 
sources will reduce input. The impact on yields will not be immediate, it 
will be felt in a year or so."

Some believe one possible solution will be for higher government subsidies 
for poor farmers.

Pedro Sanchez of the Earth Institute at Columbia University said he thinks 
heavy subsidies for fertilizers is the best way for the farmer to cope with 
the "worrying" prices.

"The way they are coping is they are getting subsidized fertilizers and 
improved seeds," he said. "And they are basically tripling their yields of 
their basic food crops, like corn. And they are having surpluses."

(For pix click here#a=1)

(Reporting by Russ Blinch and Roberta Rampton; Additional reporting Naveen 
Thukral in Kuala Lumpur and Manny Mogato in Manila; Editing by Eddie Evans)