Recent price spikes in fertilizers have highlighted the agriculture sector's heavy reliance on these inputs, posing a challenge for policymakers tasked with regulating agricultural markets to ensure fertilizer affordability while mitigating environmental risks. The OECD has investigated this challenge in the report "Fertile Futures: Scenario Analysis on the Interconnected Dynamics of Fertiliser and Agricultural Markets". It offers insights into the complex interaction between fertilizer use, agricultural systems, food security, and environmental sustainability.
Summary of the report
The first scenario explores the potential consequences of disruptions in fertilizer supply. While short-term disruptions could be (partially) alleviated by existing stocks, long-term shortages might have a negative impact on agricultural productivity, thereby, increasing global food prices up to 6%. Therefore, understanding and managing the duration of such shortages is important for maintaining resilient and sustainable farming.
The second scenario investigates the hypothetical elimination of fertilizer subsidies in India. This leads to a large reduction in India's fertilizer demand, resulting in decreased production and exports, coupled with increased imports. Despite a modest impact on global food prices (+0.8%), this scenario highly reduces agricultural greenhouse gas emissions by 7 million tonnes of CO2 equivalent. This illustrates the role of (a large country's) national policies in achieving global environmental sustainability goals.
In brief, the report emphasizes the need for policies that achieve a balance between affordability and environmental sustainability in fertilizer use. Furthermore, it highlights the relationship of national policies with global agricultural markets and environmental impacts, underscoring the importance of informed decision-making in shaping the future of global agricultural systems.
Source: agroberichtenbuitenland.nl