The government has unveiled a package of measures designed to support farmers amid surging energy and artificial fertiliser costs

The costs of war keep adding up. Not only is Russia’s invasion of Ukraine triggering a humanitarian crisis and reigniting the Cold War, it is also sending shock waves through the global economy and forcing governments and businesses alike to rethink their long term plans. Most notably, the crisis is putting pressure on policymakers to reduce dependency on oil and gas, but it is also prompting renewed thinking around artificial, environmentally-damaging fertilisers, the costs of which are surging as a result of current geopolitical instability.

In a bid to cushion farmers from surging energy and commodity costs, the UK government today announced it is to delay planned restrictions on the use of some fertilisers linked to air pollution, while also setting out plans to encourage organic and sustainable agricultural production in the longer term.

The moves are among a host of measures designed to assist British farmers ahead of the coming growing season, with Russia’s war in Ukraine further exacerbating rising costs for energy, manufactured fertilisers, and other key agricultural commodities.

Fresh limits designed to reduce ammonia emissions from urea fertilisers were published for the first time today following a consultation, although the government said it would postpone the introduction of these restrictions by a year to April 2023 in order to give farmers more time to adapt to the changes given the current crisis.

Revised statutory guidance has also been published to encourage farmers to limit the use of slurry and other farmyard manure at certain times of the year, and potentially use it during autumn and winter to meet agronomic needs, in a bid to help further reduce dependence on artificial fertilisers.

Alongside these measures, further details of the Sustainable Farming Incentive – a key pillar of the government’s post-Brexit subsidy regime designed to encourage farmers towards greener farming practices – were also been published.

Defra said that, given current surging fertiliser prices, the priority should be to pioneer new technologies to manufacture more organic fertiliser products and “rediscover techniques such as using nitrogen fixing legumes and closers and alternatives to fertilisers”.

Environment Secretary George Eustice said the Sustainable Farming Incentive would over time help encourage farmers towards greener agricultural techniques that could help to boost soil health and combat soil erosion, thereby helping bolster food security and longer-term resilience of the sector.

“The significant rise in the cost of fertiliser is a reminder that we need to reduce our dependence on manufacturing processes dependent on gas,” said Eustice. “Many of the challenges we face in agriculture will require a fusion of new technology with conventional principles of good farm husbandry. The measures we have announced today are not the whole solution but will help farmers manage their nitrogen needs in the year ahead.”

The current crisis has prompted calls from green groups for farmers to reduce their reliance on environmentally-damaging fertilisers and shift towards more sustainable farming practices, amid concerns that the situation could lead to a push for increased intensive agricultural production to cushion against the hike in costs and a drive by farming groups to bring more land into agricultural production.

Some observers fear the conflict in Ukraine and the impact on global food supplies could pose a threat to efforts to expand natural carbon sinks and introduce new rewilding initiatives, as policymakers all around the world look to bolster domestic food security. But others counter that surging food prices and the way in which the global market for key commodities like wheat and sunflower oil are dependent on a few producers could highlight the wisdom of more localised supply chains, sustainable farming practices, and meat-free diets.

Against this backdrop, both environmental groups and industry bodies appeared to cautiously welcome today’s announcements from the government on how it intends to support farmers during the current crisis and reduce long term dependency on artificial, environmentally-harmful fertilisers such as urea.

The Soil Association’s farming director Liz Bowles welcomed the moves announced today, while stressing that it was “vital that we act differently to our post-war response in the 1940s by prioritising climate and nature alongside food security”.

“The ongoing damage being done to soils, wildlife, and climate poses the biggest threat to food security and nature-friendly, agroecological farming provides the best path to ensuring long-term resilience,” she said. “The transition needed cannot happen overnight, and a step-change in funding for farmer-led research and peer-to-peer learning will be essential. This will help farmers gain the confidence needed to recycle nutrients from livestock or nitrogen-fixing crops like clover in more complex rotations.”

Dr Richard Benwell, CEO of the Wildlife and Countryside Link – a coalition of 65 environmental and wildlife organisations in England – also welcomed the measures outlined by the government today, which he said would help to reduce dependence on artificial fertiliser.

But he stressed that, with the government having previously signalled its preference to ban the use of urea fertiliser altogether in future, measurable thresholds should be put in place to ensure limits on its use are effective and properly adhered to.

“Investing in healthier soils and reducing reliance on chemicals is a triple win,” he explained. “It will help steady food production costs in the short term, it will ensure farms stay productive in the future, and it will cut pollution that blights our rivers and streams. Some argue more intensive farming is needed to counter pricing pressures, but this crisis should convince government to stick to its path and up the pace in delivering its promise of a more sustainable English farming system.” 

Britain is facing the worst cost of living crisis in decades thanks to surging energy prices and inflation in the wake of Covid crisis, further exacerbated by Russia’s invasion of Ukraine. Both Russia and Ukraine are major wheat and fertiliser producers, and rising energy costs as well as supply chain issues are also pushing up food and fertiliser prices, with major ramifications for UK farmers.

British farmers may have already been hit with an additional £160m on their fertiliser bill, largely caused by escalating fossil gas prices and the war in Ukraine, according to an analysis by the Energy and Climate Intelligence Unit (ECIU), and it warned that bill could rise as high as £760m by the end of this year.

“Chemical fertilisers are made from gas leaving farmers exposed to the gas price rises that households are seeing on their bills too,” explained ECIU’s climate and land programme lead Matt Williams, who said government efforts to seek low carbon fertilisers less reliant on fossil fuels should help to curb costs for farmers. “Such measures will simultaneously cut gas dependency, help us to reach our net zero climate target and improve food security.”

The think tank estimated that, based on the latest available figures for 2020, the UK imported 17,700 tonnes of urea, 2,000 tonnes of potash, and 3,000 tonnes of diammonium phosphate from Russia on average each month, amounting to total costs of around £16m per month for fertilisers.

Mark Tufnell, president of the Country Land and Business Association, welcomed the government’s announcements today, but stressed it was “important to recognise the sheer scale of the challenges ahead in the UK’s food production”, and warned that farmers still faced major uncertainty ahead.

“The exceptionally high price of fertiliser can be mitigated only to a degree by high commodity prices,” he said. “Some farmers may choose not to spread fertiliser at all this year. But if prices continued to stay at this all-time-high then government will need to urgently consider ways of increasing and diversifying domestic fertiliser production.”

National Farmers Union president Minette Batters said farmers were experiencing “unprecedented costs” when buying fertilisers alongside tightening suppliers, and therefore welcomed many of the measures outlined by Defra today as “positive” for the sector.

However, she urged the government to provide more certainty over the rollout of the Sustainable Farming Incentive, as the offer currently available would not be suitable for all farms.

“With such huge uncertainty I remain extremely concerned that farmers in England are facing a very different approach to the rest of the UK,” said Batters. “With farmers in England receiving less direct support, the government must ensure new ways of farmers and growers managing their risk and volatility.”

With wider geopolitical instability showing little sign of subsiding in the near future, and global energy prices expected to continue on their upward trajectory for 2022 and potentially even longer, the ramifications are sure to be felt far and wide by consumers and right across different industries for the foreseeable.

Amid such challenges, policymakers will be under continuing pressure to offer further support for farmers weathering such costs, which look set to hit their pockets particularly hard, and at a time when they are already facing deep uncertainty following Britain’s exit from the European Union.

The measures unveiled by the government today have been given a cautious welcome, but whether they are enough to cushion against further price pressures – and also help accelerate the shift towards greener agricultural practices – very much remains to be seen.

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