"At least two years of heavy investment will be needed" to increase world fertiliser production and restore balance to the market, according to Roberto Rodrigues, a former agriculture minister who heads a centre for agribusiness studies in the southern city of Sao Paulo.
AGRICULTURE-BRAZIL: Fertiliser Prices Hinder Expansion
By Mario Osava
RIO DE JANEIRO, May 28 (IPS) - A simple imbalance in agricultural supply and demand can be corrected in less than a year, the time it takes to sow and harvest grains, but the present global food crisis cannot. The shortage of fertilisers and their consequent rise in cost are standing in the way of quick solutions.
"At least two years of heavy investment will be needed" to increase world fertiliser production and restore balance to the market, according to Roberto Rodrigues, a former agriculture minister who heads a centre for agribusiness studies in the southern city of Sao Paulo.
The current shortage is due to many years of underinvestment by large fertiliser companies discouraged by low profits. To correct that trend will take time, Rodrigues told IPS.
Prices will remain sky-high. Nitrogenated fertilisers, which are in greatest demand worldwide, track oil prices because they are based on fossil fuels, in particular natural gas.
In 2005-2006, world consumption of the three main elements in fertilisers -- nitrogen, phosphorus and potassium -- was 155.4 million tonnes, of which 60 percent was nitrogen, according to the International Fertiliser Industry Association.
Taking into account other agricultural inputs like pesticides and fuel for transport and farm machinery, the oil dependence of agribusiness does not hold out hopeful prospects for a drop in food prices soon.
Brazil, with huge amounts of land available, has enormous potential to expand its food production, but it is held back by the "fertiliser bottleneck," said Rodrigues.
Two-thirds of the fertiliser used in Brazil is imported, and the soils of the "cerrado", the country’s vast central grasslands region, where grain and sugarcane cultivation are expanding the most, need plenty of fertiliser, especially potassium. Brazil is the world’s fourth largest consumer of fertilisers, after China, India and the United States.
Therefore other kinds and sources of fertilisers must be developed, like sugarcane vinasse (a liquid residue from the ethanol distilling process) which contains high concentrations of potassium, and local deposits of the required minerals must be sought, the former minister said.
Cutting down on agrochemical consumption is a priority at the Brazilian Agricultural Research Corporation (EMBRAPA), a state network of 41 centres located around the country, which generate agricultural knowledge and technology that were decisive for the great leap forward in productivity in the last two decades.
Close to 60 million tonnes a year of soybeans are produced in Brazil, "without using a single kilo of nitrogen," said Segundo Urquiaga, a researcher at EMBRAPA’s agrobiology centre, which developed the technique of inoculating bacteria into beans to boost nitrogen fixation from the air.
This technique saves the country five billion dollars a year, "six times what it invests in agricultural research," Urquiaga told IPS.
It also improves yields and is good for the environment, unlike chemical fertilisers, which tend to build up excess nitrogen in the soil that is released as nitrous oxide, a gas with 300 times the greenhouse effect of carbon dioxide, he said.
Biological nitrogen fixation is also being applied in sugarcane cultivation, where it supplies between 60 and 70 percent of requirements, but only in a few varieties, the researcher said. Another approach, he added, is to "alternate crops of sugarcane and beans to enrich the soil."
As a result of this and other advantages of tropical agriculture, this country uses less nitrogen than phosphorus or potassium, in contrast with other agricultural powers. In China, for example, highly polluting nitrogenated fertilisers make up 64 percent of the total, compared with 26 percent in Brazil.
However, a great agricultural expansion cannot be achieved without costs. Brazilian grain production has more than doubled since 1990, with only a small increase in cultivated area, thanks to a 178 percent rise in fertiliser application, according to statistics from the National Association for the Promotion of Fertilisers (ANDA).
Cooperatives and farmers’ associations are now demanding price control mechanisms as a condition for increasing food supply. The government wants, above all, to raise wheat production rapidly, in order to limit its dependence on imports that provide two-thirds of the 12 million tonnes a year of wheat consumed in Brazil.
But this goal clashes with the high price of fertilisers, which have risen by an average of 73 percent over the last 12 months, according to the government statistics institute. Fertiliser costs represent more than 40 percent of total production costs for some grains, double their share a few years ago, farmers say.
The government could, for instance, eliminate a 25 percent tax on transport by sea, to bring down the cost of importing fertilisers, ANDA vice president Torvaldo Marzola Filho told IPS.
The situation is aggravated by the fact that some producing countries are exporting less fertilisers. China decided to impose a tax of between 100 and 135 percent on fertiliser exports, Marzola said. Brazil only continues to import them because food prices, which are also sky-high, still outweigh the additional costs, he said. (END/2008) |
