Global developments are causing a chain of spin-off effects that influence the food chain at an international and local scale. The ongoing conflict between Ukraine and Russia has resulted in price increases for natural gas which is needed to produce ammonia and then nitrogen, key elements of fertilizers, as well as increased fertilizer transportation costs.
The ongoing conflict has also exacerbated the fertilizer market disruption by forcing certain countries to prohibit fertilizer exports. These have aggravated the fertilizer crisis, resulting in a 20% decrease in global trade of key ingredients for fertilizer manufacturing. Furthermore, COVID-19 related supply chain disruptions and fertilizer export restrictions enforced by producing countries are adding to exponentially rising agricultural input costs.
In Ethiopia’s food system, inorganic fertilizer is a critical input for enhancing agricultural productivity. However, it is not produced locally hence there is a heavy reliance on
imported fertilizers, making the country extremely vulnerable to global price shocks. These global drivers may have a negative impact on Ethiopia’s food security if they are not addressed adequately. The negative impact on grain production, such as maize, teff
and wheat, is likely to raise the prices of these staple foods, making them less accessible
and affordable for vulnerable households.
The soaring fertilizer cost may constrain farmers from using fertilizer, with negative
repercussions on production and food prices. Studies have shown that in the absence
of fertilizer application, the productivity of maize, wheat and teff would decrease by 73,
59 and 56%, respectively. In line with high demand and use of fertilizers, the highest cereal
production decrease in 2022 is expected in Ethiopia (21.1%) (WFP, 2022). Cereal prices
have already witnessed sharp increases throughout 2021 and 2022, which will only continue
rising if adequate measures are not undertaken.
Farmers in high potential food systems, who use the major share of fertilize to produce
cereal and staple crops, will be affected by the increased cost. In addition, households in
low potential and commercial food systems as well as urban community will also be affected,
either directly or indirectly as food prices could increase in the wake of lower availability
of staple foods. This is because the high potential food system is the major supplier of
agricultural outputs to other food system typologies.
Although Ethiopia procured fertilizers before the start of the Ukraine war, the cost of fertilizer has risen almost two-fold when compared to that of 2020. According to MoA (2022), the country needs about 1.9 million tons of fertilizers for this cropping season. As July around 1.5 million tons of fertilizer reached to farmers’ cooperative and union, 0.82 million tons have
already been distributed to farmers. Moving fertilizer from ports to the final destinations needs urgent action in arranging logistics and maintaining security of transporters along the way. It is of paramount importance to design an integrated strategy to address the fertilizer
supply and distribution system problems. In the absence of a strategy the food system is likely to be affected in multiple ways.
The government’s endeavour to subsidize fertilizer costs is a positive move that requires
Together with national level stakeholders and project partners, RAISE-FS is working
on a fertilizer alert study. This study will provide insights into the current situation and recommendations for mitigation and resilience strategies with a short, mid- and long-term perspective.