Ag ministers for the Group of Seven nations this weekend pledged action to counter the rising cost and scarcity of fertilizer, said U.S. Agriculture Secretary Tom Vilsack, who was at the meeting in Germany.
First and foremost, nations around the globe need better information, Vilsack said, and the G-7 ministers agreed that the United Nations Food and Agriculture Organization should play a major role.
The ministers from the U.S., Canada, France, Germany, Italy, Japan and the European Union agreed to increase funding and expand the activities of the FAO’s Agricultural Market Information System (AMIS), which monitors wheat, corn, rice and soybean markets, providing transparency for supply data in countries around the globe, Vilsack told Agri-Pulse.
AMIS needs to do more of what it’s already doing, but also monitor worldwide fertilizer prices and supplies, Vilsack said.
“The theory behind this is that we need to have expanded and increased transparency in the pricing of grain and fertilizer,” Vilsack said. “There is the belief among many of us that there is speculation taking place in the grain markets, which can distort prices … beyond actual market value, which is obviously significant. Expanding AMIS to include a review of the fertilizer market is also incredibly important, given the high cost of fertilizer.”
International banking and other sanctions on Russia and Belarus after the Russian invasion of Ukraine, together with Russian export restrictions, have shut off much of the fertilizer supplies that normally flow to international markets.
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Before Vilsack’s trip to Germany, President Joe Biden tasked him and the other G-7 ag ministers with finding solutions.
“They’re going to see what actions we can take to increase fertilizer suppliers globally and identify how we can work together to prevent export restrictions on food and agricultural inputs and bring more global production to market, which will stabilize prices and bring more certainty to our farmers and keep people from dying of hunger,” Biden said last week.
When markets are tight and information is murky, countries are more likely to panic and take actions like banning exports of grain or fertilizer, which only makes the situation worse, says Joe Glauber, who is the interim secretary for AMIS as well as a senior research fellow at the International Food Policy Research Institute.
The G-7 decision to focus on AMIS and push for an expansion into fertilizer is very welcome news, said Glauber, who helped establish the FAO division just a little more than a decade ago.
“It’s important is to have AMIS around when markets are tight like this,” he told Agri-Pulse. “It’s hard to generate much interest when prices are moderate and supplies are plentiful, but you need a good information system and that’s why AMIS is important … When you have better information about markets, you’re less likely to take actions that are ill-advised.”
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