Will you be unable to farm?
Hidden “Food Shock” Whereabouts of Fertilizer Battle June 27, 18:07
"I may not be able to farm at this rate ..."
I have heard shocking words from many producers since last fall.
It was because of the soaring prices of fertilizers and the indescribable anxiety that they might not be able to procure them.
The reality of the "food shock" that strikes from the ground, not the agricultural products themselves, but the fertilizer.
The shock is spreading not only in Japan but also in the world, and is about to shake people's food.
(Reporter Naoko Kawase, Department of Economics / Director Ryusuke Kimura, Sao Paulo Branch)
Soaring fertilizers that plague farmers
"I'm worried if I can continue farming as it is,"
said Toshihide Hayashi, who produces paprika in a greenhouse in Mito City, Ibaraki Prefecture.
When I asked the greenhouse, it was about to be harvested.
In this greenhouse, "hydroponic cultivation" is performed in which liquid fertilizer is applied to the roots of paprika, and fertilizer is indispensable for the growth of paprika every day.
However, the price of this fertilizer is gradually increasing.
A fertilizer that was 200 yen per kilo until January will be 325 yen in March.
Furthermore, the price increased to 355 yen in May, and the price increased by more than 70% in half a year.
It's not just about price increases.
It may be difficult to procure fertilizer.
I was shown an email from a supplier that arrived to Mr. Hayashi.
It said, "There is a sign that (fertilizer) will be difficult to obtain in the future."
Mr. Hayashi
"If you can't procure fertilizer, you can't cultivate it, you can't farm, it's an urgent story.
I hope you can secure fertilizer at a reasonable price that is commensurate with production."
The actual situation of overseas dependence
Why is the price of fertilizer rising?
There is a structure of Japanese agriculture that relies on imports for fertilizer raw materials.
Nitrogen, phosphoric acid, and potassium are the three essential elements for plant growth.
Each is said to be necessary for growing stems, bearing fruit, and growing roots, and the lack of ingredients in the soil must be given as "fertilizer".
Of the fertilizers, "chemical fertilizers" are made from minerals.
It is used by most Japanese producers because it provides them with the nutrients they need efficiently.
However, Japan is scarce in raw material resources and relies mostly on imports.
This is the source of urea, ammonium phosphate, and potassium chloride, which are the raw materials for the three elements.
37% of urea and 90% of ammonium phosphate are imported from China.
In addition, potassium chloride imported 16% from Russia and 10% from Russia's ally Belarus.
The world order of fertilizer that has begun to collapse
Fertilizer raw material that relies on imports.
A major turning point was the move by China in October 2021.
At that time, in China, the spread of the new coronavirus was in a lull, and while the demand for grains increased in the process of normalizing the economy, the production of chemical fertilizers was restrained due to power shortages and consideration for environmental problems. Fertilizer prices in Japan tended to rise.
Under these circumstances, the Chinese government has announced that it will require inspections when exporting chemical fertilizers.
It is unusual to have such an inspection in fertilizer exports.
It is believed that de facto export restrictions have been taken in order to prioritize the supply of fertilizer to the country.
After the announcement, exports of fertilizer raw materials have stopped for a while.
Japanese trading companies have been busy looking for alternatives.
Further February.
Russia launches a military invasion of Ukraine.
Russia is also one of the world's leading fertilizer raw materials.
The Japanese government does not subject fertilizer raw materials to economic sanctions, but trading companies in charge of imports voluntarily stop importing potassium chloride from Russia.
For another reason, economic sanctions were imposed by the United States and other countries, and we had to find an alternative source of fertilizer raw materials for 26%, including Belarus, which could not be imported.
The price is also soaring.
Looking at potassium chloride, it is nearly five times that of January last year.
Trading companies are busy looking for alternatives ...
JA Zen-Noh = National Federation of Agricultural Cooperatives, which is responsible for importing 50% of Japan's fertilizer raw materials, was also busy responding.
Immediately after China issued a notice requiring inspection of fertilizer raw materials, he requested a Moroccan company in Africa with which he had a long-standing deal to procure ammonium phosphate.
In addition, potassium chloride, which was imported from Russia, secured the required amount for the time being by increasing imports from Canada.
However, due to similar movements in each country, shipping vessels and loading ports are now in full operation.
It is said that the last-minute adjustments to transport the ship to Japan continued, such as by sharing the ship with other trading companies.
In addition, we have begun negotiations with countries in the Middle East, which we have had little contact with, in order to secure stability in the future, but the supply and demand are tight everywhere, and negotiations are not straightforward.
JA All Agricultural Materials Department General Manager Hibi
"Although there have been soaring fertilizer prices, this is the first time that anxiety about procurement has arisen.
Countries with resources and countries that can export fertilizer I would like to make contact and make efforts to procure fertilizer raw materials so as not to run out. "
Impact spreads in Brazil
Such soaring fertilizer prices and concerns about procurement are spreading all over the world.
Brazil, an agricultural powerhouse.
We export many agricultural products to countries all over the world.
We export corn (35% of total imports) and soybeans (15% of total imports) to Japan.
On the other hand, 85% of fertilizer raw materials depend on imports, which is affected by rising prices of fertilizer raw materials internationally.
Kenji Okamura, a second-generation Japanese farmer in the state of Sao Paulo in southeastern Brazil, grows soybeans, corn, and wheat on a vast farmland of 1,600 hectares.
Mr. Okamura is also worried about the rising price of fertilizer raw materials.
Last year, fertilizer, which was 2800 reals per ton (about 73,000 yen in Japanese yen), has almost doubled to 5800 reals (about 153,000 yen) in May.
Mr. Okamura is doing double cropping, which is harvested twice a year, so the burden of fertilizer costs is particularly heavy.
Mr. Okamura
"I'm worried about the rise in fertilizer prices and the securing of fertilizer next year."
Brazil depends on two countries, Russia and Belarus, for about 40% of the fertilizer raw materials it imports.
President Bolsonaro visited Russia on February 16th, a week before the military invasion began, and met with President Putin.
Fertilizer procurement has become a major agenda item.
Brazil has remained neutral to economic sanctions on Russia since the beginning of the military invasion.
President of Brazil Bolsonaro
"(I went to Russia) for the national interest of Brazil.
I will remain neutral to the military invasion, but I cannot survive without fertilizer."
The Japanese government also supports fertilizer procurement
The Japanese government is also moving to procure fertilizer.
Deputy Minister of Agriculture, Forestry and Fisheries dispatched to Morocco, the United States, and Canada.
We are supporting the stable securing of fertilizer in diplomatic routes.
In addition, JA and trading companies subsidize fertilizer companies for increased transportation costs due to switching suppliers.
Consideration of a new system to reduce the cost burden of farmers has also begun.
What will happen to fertilizer in the future?
Experts point out that the international fertilizer shortage is not temporary.
Japan Research Institute Miwa Expert
"In the past, fertilizer prices have soared due to disasters and increased demand, but this time there are restrictions on exports from China, Russia and Belarus, and restrictions on trade, including voluntary ones. Is the starting point, and it is occurring with extremely political factors.
Countries with vast land and abundant resources are increasing their voice internationally, and it is a matter of political friction. In many cases, it becomes a country, and there is a possibility that the resources that Japan needs will be insufficient due to the international situation, so I feel that a drastic solution will be required in the future. "
What is the path Japan should take?
So what should Japan do?
It has been pointed out that Japanese agriculture uses more chemical fertilizers than other countries.
Although there are differences in the crops grown and the soil quality, the Ministry of Agriculture, Forestry and Fisheries points out that some components have excessive fertilizer components accumulated in the soil.
Therefore, the national government and JA Zen-Noh are now trying to promote "reduction of fertilizer" to reduce fertilizer.
The key is the spread of methods for analyzing soil composition.
By giving only the minimum necessary ingredients as fertilizer, we aim to reduce fertilizer.
Furthermore, agricultural machines that use AI to sprinkle fertilizer only where fertilizer is needed are being put into practical use.
Furthermore, the use of "compost" made from livestock manure and food residue is attracting attention again.
It has been used in organic farming, etc., but it is a region where livestock is thriving because it takes time to sow, there are variations in quality, and it is costly to transport because it contains water. It was only used around the area.
However, nowadays, in addition to fertilizers made by supplementing the insufficient components of compost with chemical fertilizers, the technology of drying, crushing and pelletizing livestock manure has been developed and commercialized.
By making pellets, it will be easier to transport and it will be possible to spray them by machine, which is expected to spread.
Miwa of the Japan Research Institute said as follows.
The Japan Research Institute, Limited Miwa Expert
"Judging and procuring only based on economic rationality is no longer suitable for times when there are many risks, and it is necessary to change to agriculture that is resistant to fertilizer risk.
You can buy it if you spend money .
Instead, we have to make changes such as securing ourselves well and creating a market. We
have to promote domestic agriculture on the premise that there is a risk if we cannot be self-sufficient. "
Japanese agriculture at a turning point
When it comes to food security, the first thing that comes to mind is imported agricultural products such as wheat and corn.
However, if the procurement of fertilizer is delayed, even the production of rice and vegetables that are self-sufficient in Japan may become unstable, and the actual situation of dangerous agriculture has emerged.
The government has also begun a new debate, saying that measures for fertilizers were inadequate.
A series of problems have revealed the distorted structure of Japanese food, which pursues economic rationality and relies on imports for most of the ingredients and materials needed for production.
However, there are new costs associated with the measures.
How do you perceive the price pass-through for that amount?
I feel that the "hidden food shock" of fertilizer requires us consumers to choose ingredients with an eye on the future.
The looming “food crisis” What will happen to food in Japan and around the world?
* We will continue to serialize the "Food Shock" series from various perspectives, depicting the current situation of
rising food prices and the food shortage crisis facing Japan and the world .
Click here for the first
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* We will continue to serialize the "Food Shock" series from various perspectives, depicting the current situation of
rising food prices and the food shortage crisis facing Japan and the world .
Click here for Part 2
Naoko Kawase
, a
reporter from the Ministry of
Economic
Affairs
Ryusuke Kimura, Director of Sao
Paulo Bureau
Joined in 2003
After working at the Berlin Bureau and the Ministry of Economic Affairs, he is currently in charge of interviews in Central and South America.