In Brussels everything is filtered, and it seems that the Action Plan on Fertilizers that the European Commission presented yesterday, May 19 in the afternoon, has not been an exception. For days, the agricultural groups that make up COPA-Cogeca have been preparing to gather in front of the European Parliament headquarters in Strasbourg and demand more forceful measures. Measures that, in their opinion, have not arrived.
“The Commission's decision to bring forward the publication of its Action Plan on Fertilizers had initially been interpreted as an encouraging sign and a step in the right direction. However, today it is perceived as a profound disappointment: although the Commission has numerous instruments and mechanisms to act directly on the fertilizer crisis, nothing announced today offers a real response”, they stated in a COPA-Cogeca press release.
400 million euros in aid
The European Commission is aware that the price of fertilizers is today 70% more expensive than in 2024, according to the Commissioner for Agriculture and Rural Development Christophe Hansen. However, the problem, for the moment, is because they are more expensive, not because there is a shortage. “Now there is no supply problem, but a price problem, and that is what needs to be resolved”, he declared.
Therefore, the Commission announced yesterday that it will work on a line of aid that it will present before the summer, so that it can be applied afterwards, just at the time of sowing herbaceous crops, productions in which fertilizers represent around 25% of the crop cost. For this aid, the Commission will use the agricultural reserve fund of the Common Agricultural Policy, which has 200 million euros, and will ask the colegislators, the European Parliament and the Council, to double it to offer up to 400 million euros.
On the other hand, the European administration also proposes other measures so that member states can make the payment of CAP aid more flexible and facilitate farmers' liquidity.
Abolition of the CBAM
European farmers demanded the abolition of the CBAM (an acronym in English that in Spanish corresponds to the Carbon Border Adjustment Mechanism) and the temporary elimination of tariffs on imports from Less Favored countries other than Russia and Belarus, two taxes that have recently come into effect in order to equate European production with that of third countries and which increase their price on the market. However, none of these requests have been granted, although the Commission has agreed to prepare a report evaluating the costs of these taxes for European food production.
“We cannot forget the internal fertilizer industry. In recent months, companies have closed in the European Union that do not want to invest due to unfair competition with third countries. We cannot lose production capacity in Europe”, stated Hansen, who added “We must look not only at the short term, but also at the long term”.
External dependence
Although the fertilizer industry in Europe is powerful, it depends heavily on raw materials from third countries and natural gas to transform them, (hence a significant part of the increase in fertilizers in recent years).
“Europe cannot continue to maintain its production structure based on nitrogen fertilizers produced from a gas that we do not have. We need to reform logistical chains that are very vulnerable to any geopolitical conflict,” declared the general secretary of UPA, Cristóbal Cano.
Furthermore, Russia's invasion of Ukraine or the closure of the Strait of Hormuz have complicated the situation and generated great uncertainty in a global market where prices are international. “We have to find new suppliers,” said Hansen, who also advocated for organic fertilizers and digestates. “If we make maximum use of the organic fertilizers available in the European Union, we can replace 30% of the fertilizers we import,” asserted the commissioner.
Finally, to make the market run more smoothly, the Commission announces the creation of a fertilizer value chain association, bringing together producers, farmers, and member states to define a common path to help overcome challenges.
“Europe cannot afford to lose agricultural productive capacity due to the lack of affordable fertilizers. If immediate and forceful action is not taken, there will be direct consequences on production, food prices, and European food sovereignty,” Jaume Bernis, head of COAG in the European Economic and Social Committee (CESE), has stated.
Although the situation of Spain falls within that of the European Union, it is somewhat different, since it has enough factories to guarantee the necessary fertilizers in the Spanish countryside and part of the energy it uses comes from renewable sources. However, a large part of the raw materials come from Egypt, Morocco, and Algeria.