Burdensome environmental regulations are driving up the cost of fertilizer — and food
jbrotton
By Blake Hurst August 29, 2022 06:00 AM
The recent run-up in food costs is the result of dry weather in much of the world and the Russian invasion of Ukraine. But at least part of the increase in food prices is due to fertilizer shortages and higher prices for plant food. According to Bloomberg:
In Brazil, the world’s biggest soybean producer, a 20% cut in potash use could bring a 14% drop in yields, according to industry consultancy MB Agro. In Costa Rica, a coffee cooperative representing 1,200 small producers sees output falling as much as 15% next year if the farmers miss even one-third of normal application. In West Africa, falling fertilizer use will shrink this year’s rice and corn harvest by a third, according to the International Fertilizer Development Center, a food security non-profit group.
If temporary disruptions in supply and price increases for fertilizer have already caused problems worldwide, it’s hard to imagine why governments would want to support a policy that has such predictable and damaging results. But imagine we must, because governments around the world have decided cuts in fertilizer use are a leading solution to climate change.
Sri Lanka completely outlawed the use of commercial fertilizers. That didn’t work out very well, and their president was last seen decamping from Sri Lanka to someplace far away from his hungry former subjects.
The European Union is encouraging a rapid move toward organic farming that forbids the use of commercial fertilizers. The EU’s Farm2Fork initiative has set a goal of 25% organic production in the next 10 years.
Canada has recently promised to cut fertilizer use by 30% by 2030, but the prime minister there at least tacitly acknowledging that his Sri Lankan colleague might have overdone it.
Police in the Netherlands are firing at tractor driving farm protesters, who are mightily upset that recent fertilizer recommendations will likely drive many of them out of business, with cuts in allowable nitrogen emissions as high as 70%.
Here in the United States, President Joe Biden's administration has imposed costly duties on fertilizer imports, exacerbating the rising cost of fertilizer and blocking agricultural productivity.
The results of these policies are as easy to predict as guessing that a circular firing squad won’t end well. The demand for food is inelastic, meaning that when supply drops, prices increase by a larger (usually much larger) amount.
Food is a much higher portion of family living costs for poor people than their better-off neighbors. In 2020, food costs made up 7% of living expenses for the highest income quintile in the U.S., while food expenses consumed 27% of the family budget for people in the lowest income quintile.
No nation would knowingly enact a tax plan that hit low income consumers at four times the rate that well-off people pay, but many governments are rushing to do exactly that to their nation’s food supply. If excess carbon is the problem, surely the solution isn’t punishing those around the world who consume the least.
As with so much of policy adopted in response to climate change, steps taken in the developed world won’t make a difference without cooperation from the rest of the world. Cutting fertilizer use in Canada won’t change Brazil’s agriculture policy for the same reason that cutting carbon emissions in the U.S. won’t stop China’s pollution.
Moreover, the high prices for crops caused by undernourished crops will ensure that production expands to areas that aren’t presently farmed, including marginal and environmentally sensitive farmland in the developed world. Deforestation in the developing world will become common, which undercuts the environmental goals of these climate regulations entirely.
In other words, governments’ environmental regulations are both costly and counterproductive.
In the past month here in Missouri, my yield prospects have dropped precipitously due to dry and hot weather. While conditions in the eastern Corn Belt are better, we have lost any chance of the outstanding yields that the world food supply so desperately needs. It’s not a reason for panic, as stocks are adequate to see us through the next year and commodity prices have weakened in the last few weeks due to the good weather in the eastern Corn Belt and recessionary fears. But the fact remains that world food supplies are teetering on the edge of a shortage.
We can’t improve the weather, at least not in time to ensure better yields. We can, however, avoid government actions that ensure that the poorest among us will struggle to afford enough food.
Blake Hurst is a farmer in northwest Missouri.