New threat to food system: pricey fertilizer

Tue Jun 10, 2008 10:11am EDT
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By Russell Blinch and Roberta Rampton

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.   Continued...

<p>A farmer spreads fertilizer on a rice field in La village, 20 km (12.5 miles) outside Hanoi April 16, 2008. REUTERS/Kham</p>