More than two months into the US-Israel war on Iran, it appears we are veering towards another global food crisis. The conflict is driving up the costs of fuel, fertilisers, plastics and transport, resulting in higher food prices for communities from Manila to Quito. And now food production is at risk, with upwards of 20 percent of global fertiliser exports unable to move through the Straight of Hormuz and shipments of natural gas and sulphur, vital to the production of fertilisers elsewhere, blocked.
International agencies are particularly concerned about the implications for Africa, where hundreds of millions face food shortages and where many countries are highly dependent on food imports. Now, some high-level officials at development banks are calling for urgent actions to secure more fertilisers for African countries in order to deal with the looming crisis.
We have been here before. During the global food crisis of 2008, the same development banks and many African governments pushed through a wave of programmes that handed vast areas of Africa’s lands to agribusiness companies and subsidised chemical fertilisers, for both small and big farmers.
Some of these large-scale projects failed spectacularly, leaving a trail of destruction that communities have yet to recover from. But so, too, did subsidised fertiliser schemes. In many cases, they were unable to significantly increase fertiliser use per farmer or reduce hunger, and left governments drowning in debt. Malawi, for example, spent so much on subsidising fertilisers at the time that it had to cut its budget for public infrastructure and education.
The dilemma for these fertiliser programmes, time and again, is price. Fertilisers are not just expensive in Africa; they are more expensive than in most other places. The corporations and traders that control the fertiliser market make profit margins of 30-80 percent across the continent. When global prices rise, they jack their prices up even further and then keep them there as prices fall back elsewhere. Farmers, even at subsidised prices, struggle to meet their costs of production. To avoid debt, they have to use less fertiliser or none at all.
Africa’s high dependence on fertiliser imports makes the situation worse, depleting scarce foreign reserves to pay an overseas fertiliser cartel. And when global supply shocks hit, like today, African countries may be unable to even access any fertiliser from the international market.
Efforts to boost production on the continent bring their own challenges. Billionaire Aliko Dangote runs Africa’s largest urea fertiliser factory in his home country, Nigeria. It ships most of its urea to the United States and Brazil, and what it sells on the domestic market, or in other African countries, reflects the prices it can get internationally. In early March, just one week after the US and Israel began their assault on Iran, Dangote’s company hiked its urea prices by 40 percent.
Building more fertiliser factories in Africa will also mean more toxic pollution for local communities. People living near the phosphate factories of the Groupe Chimique Tunisien in Gabes, Tunisia, have been fighting for years to shut it down because of how the pollution is damaging people’s health, land, and waters. And the impacts are not just local. Chemical fertilisers are one of the leading contributors to climate change, responsible for more global greenhouse gas emissions than air travel.
We must look at this moment in an entirely different way. Rather than boosting African fertiliser production to replace what’s blocked in the Gulf, governments across the region should urgently redirect subsidies and policy initiatives to support agroecology.
United Arab Emirates Dirham Exchange Rate
