How fruitful is the future of fertiliser policies?

Recent price spikes in fertilisers have highlighted the agriculture sector's heavy reliance on these inputs, posing a challenge for policymakers tasked with regulating agricultural markets to ensure fertiliser 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 fertiliser use, agricultural systems, food security, and environmental sustainability. 

Fruitful Future Fertiliser
Fertiliser price index, Jan 2020 = 100

Summary of the report

The first scenario explores the potential consequences of disruptions in fertiliser supply. While short-term disruptions could be (partially) alleviated by existing stocks, long-term shortages might have a negative impact on agricultural productivity, and 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 fertiliser subsidies in India. This leads to a large reduction in India’s fertiliser 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 fertiliser 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.

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Interested in reading the full report? Click here to read “Fertile Futures: Scenario Analysis on the Interconnected dynamics of Fertiliser and Agricultural Markets".