THE rocketing cost of fertiliser is going to have a far more severe effect on food prices than the loss of exports from Ukraine and Russia, according to an Edinburgh academic.
However rather than subsidise fertilisers for farmers, Dr Peter Alexander believes there should be help for people on the lowest incomes to buy food.
He said that while there was capacity in the system to cope with the loss of exports like wheat because of the Russian invasion of Ukraine, there was far less scope for the system to cope with fertiliser costs.
“The problem is that food will need to get dearer because fertiliser is getting more expensive and that will damage the poorest in society,” said Alexander, senior lecturer in global food security at the University of Edinburgh. “Food is available – it is just not affordable.
“That is fundamentally the problem and it increases malnourishment and other things we want to avoid. We could subsidise farmers by subsidising their fertiliser which effectively subsidises food prices for everybody, or we could subsidise food prices in the shops for everybody, but those measures are not efficient. We would be much better to have a targeted subsidy for people on the lowest income because why should we take taxpayers’ revenue and subsidise food for the richest in society?”
Alexander said there was no doubt food prices would have to rise but there was a “strong argument” that consumers had not paid the full cost of food due to environmental and health outcomes that are not priced by food commodity markets.
“We need to pay the true cost of food and that effectively means food prices are going to be higher,” he said. “Secondly, we need to make sure it is affordable for everybody so we need to provide some people some way of affording it, perhaps with higher welfare.”
Issues concerning obesity and the environment show the existing system is far from perfect, Alexander pointed out.
“Prior to all this the food system was pretty broken anyway,” he said. “Rather than keep it operating in the same way we should look to make it better. We should look to have a more environmentally friendly and more equitable outcome. Fertiliser subsidy would make sense if what we had before was so perfect, but that is not the case.
“There are obesity epidemics everywhere in the world – 800 million people are undernourished in various places in the world. There is huge environmental damage in terms of over extraction of water, a loss of biodiversity which is predominantly driven by the expansion of agricultural land, and that is not even mentioning climate change.
“We have a system that is not feeding people terribly well and is vastly exceeding planetary boundaries, so keeping it as it was before by keeping fertiliser prices the same is just wrong-headed in my mind. By continuing to subsidise food for everybody then effectively we perpetuate those issues.”
Alexander said environmental issues and providing affordable nutritious food should be the focus of government policy.
“Subsidising fertiliser seems an extremely crude tool for achieving those outcomes and is likely to achieve other outcomes that we don’t want, for example environmental disbenefits and subsidising food for the richest in society as well, which costs us all,” he said. “It is more important to have targeted measures that address the fundamental concerns we have.”
