Farmers worldwide are facing increasing challenges due to the ongoing conflict in Iran. Gas prices have surged and essential fertilizer supplies are diminishing as Tehran restricts the Strait of Hormuz. This key waterway is critical for transporting oil and fertilizers. The current shortage threatens the livelihoods of farmers in developing nations, already struggling with climate changes and unpredictable weather patterns. This might lead to higher food costs everywhere.
Impact on Farmers
The situation is particularly dire for poorer farmers in the Northern Hemisphere who depend heavily on fertilizers imported from the Gulf. The planting season has begun and there is a pressing need for fertilizers, says Carl Skau, deputy executive director of the World Food Program. The best-case scenario involves food prices rising next year due to elevated input costs. In the worst case, yields could decline, risking crop failures in the upcoming season.
Baldev Singh, a rice farmer from Punjab, India, highlights the precarious situation. Many smallholder farmers might not survive without government subsidies for fertilizers when demand peaks in June. They remain hopeful for supportive interventions.
Restricted Supplies Through a Key Passageway
The Strait of Hormuz plays a critical role in global trade, managing about a third of global fertilizer shipments. Iran has cut down shipments significantly following the conflict. However, the UN has made progress in negotiating limited humanitarian and agricultural shipments through this route.
“The food system is fragile, and it depends on stable fertilizer supply chains to ensure farmers can produce the food the world relies on,” observed Hanna Opsahl-Ben Ammar from Yara International.
The blockade predominantly affects fertilizers rich in nitrogen and phosphate, crucial elements for plant growth. Chris Lawson of CRU Group notes the disruption of about 30% of the global urea trade due to this conflict.
Ethiopia is among the countries experiencing significant shortages, relying on nitrogen supplies predominantly from the Gulf. The absence of these inputs during the critical planting season is alarming as noted by food systems economist Raj Patel.
Long-Term Challenges and Solutions
Drawing insights from Joseph Glauber of the International Food Policy Research Institute, fertilizer prices have gradually fallen from their peaks following Russia’s invasion of Ukraine. Yet, grain prices have also dipped, making profit margins slimmer for farmers. In response, farmers may switch crops or reduce fertilizer use, impacting yields and likely increasing consumer prices.
Global producers, such as China and Russia, focus on domestic fertilizer supply amid these disruptions. China’s urea shipments might not resume until May, and Russian plants are running at nearly full capacity, as noted by Chris Lawson.
The situation is critical in Africa where farmers depend on fertilizers imported from the Middle East and Russia. Speaking on behalf of 25 million smallholders, Stephen Muchiri of the Eastern African Farmers Federation explains that short fertilizer delays can reduce maize yields by about 4% in a season.
Government Interactions and Future Perspectives
Governments can mitigate impacts through subsidies, promoting local production, and controlling exports. In India, considerable funds are allocated to urea subsidies, but this affects investments in long-term farming initiatives. Purva Jain of the Institute for Energy Economics and Financial Analysis highlights the increasing dependence on imported gas due to the focus on domestic urea production. Excessive use of urea also degrades local soil quality, reinforcing the call for organic fertilizer solutions.
For some experts, the current crisis underscores the need for reduced reliance on imported fertilizers, advocating shifts towards sustainable agricultural practices. Oliver Oliveros, from the Agroecology Coalition, views the present challenges as a critical moment to reevaluate and strengthen agricultural resilience against energy price fluctuations and climate changes.