Opinion: War in Ukraine Did Not Cause the Fertilizer Crisis, It Only Aggravated It

The fertilizer crisis already existed, characterized by price increases of around 200% in the last 12 months in the main products. The sad war in Ukraine has exacerbated it.

The same reasons that existed have expanded. The existing embargo with Belarus, a major supplier, now exists for Russia as well. Freight, which had already suffered price increases due to the pandemic, began to suffer even greater difficulties, with restrictions on shipping ports and sea and even land routes.

Brazilian agricultural production, which has grown a lot in recent years in response to domestic and global demands for food, has expanded the use of fertilizers by expanding the planted area and, mainly, by increasing agronomic productivity as a result of the use of fertilizers.

Domestic production of the various fertilizers never followed the growth of agriculture. Imports grew a lot, and suppliers remained few.

Public policy for fertilizers already existed on paper, but it never came to fruition. Even at the time when state-owned companies were valued and presented as a solution for development. They were interested in a lot, but they did little for fertilizers.

Petrobras already had nitrogen fertilizer production units. It recently announced the sale of the last unit, with work at a standstill in Três Lagoas, MS, to a Russian company. Who knows what day production will be able to start.

Fertilizers that rely on mining face additional difficulties. They were not competitive with imported products, which, even facing distant freight, have much easier and cheaper extraction.

In Brazil, in some cases, extraction is deep and expensive. In others, including in the Amazon region, it faces authorizations that will require essential, if possible, environmental care. It will be up to the government to analyze exploration proposals with technical criteria and transparency, offering society the necessary guarantees. The current crisis cannot be a reason for the necessary rigor to be run over. The crisis offers a new opportunity, but there will be no overnight solution.

Fortunately, the agricultural sector has been modernizing day by day. This crisis becomes an opportunity to accelerate technological advance processes already underway. Precision agriculture, in which cultivation decisions are made almost by the square meter, allows for significant reductions in the use of fertilizers. Soil analyzes identify areas where it is possible to even stop using fertilizer, at least for a season. The technically oriented economy should allow important reductions in the use of fertilizers, with little impact on productivity.

The expansion of the use of biological inputs must also be accelerated. Soy’s very success is the result of a biological process, introduced half a century ago, that accelerates nitrogen fixation. Research has made other bioinputs available to the farmer, which, among countless benefits, reduce the need for fertilizers. Here, too, the crisis will lead to greater diffusion and use of innovative technologies.

The crisis that already existed – and was exacerbated by the war – implies higher prices for agricultural products, harming consumers here and abroad. It is important, however, to face it without immediacy, investing more and better.