Soaring gas prices in Europe are about to hit you in the stomach – POLITICO

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LUXEMBOURG – It is not just your heating bill that is likely to increase with the European energy crisis; EU ministers are now warning that soaring electricity prices mean your food will be more expensive in the months to come, too.

At a meeting of European agriculture ministers in Luxembourg on Monday and Tuesday, there was consensus that the skyrocketing price of natural gas increases the cost of fertilizers, and that this increase is likely to land squarely in the consumers’ base. Natural gas is the main raw material for the production of some of the most common artificial fertilizers, such as urea and ammonium nitrate, which farmers rely on to maintain crop yields in Europe.

“The increase in energy prices: this is the main reason for the increase in fertilizer prices, and of course it may have an impact on food prices in the future, of course it is the risk, “EU Agriculture Commissioner Janusz Wojciechowski told the EU conference on Monday. Meeting of the Council, where the ministers of the 27 member countries met.

EU agriculture ministers discussed a document released by the Polish government – obtained by POLITICO – which predicted that the fertilizer crisis would trigger “social unrest” across the European Union unless policymakers policies do not stop the surge in the cost of natural gas. Warsaw blamed its traditional nemesis, Russia, for soaring prices, alleging that export giant Gazprom was restricting supply. (The Russian company says it meets the conditions of its export contracts with EU countries.)

Tensions are already mounting sharply in Poland, where the farmers’ lobby Agrounia on Monday blocked a plant of a state-owned fertilizer company called Anwil, in protest against the government allowing the export of fertilizers as farmers prices for Polish farmers are so high.

Fertilizer prices have almost doubled in just one year, according to World Bank data. Today, due to soaring gas prices, a third of Europe’s fertilizer and ammonia factories have closed or temporarily reduced production, according to Jacob Hansen, managing director of European lobby group Fertilizers Europe.

Price spikes may not be immediate, as farmers mainly use fertilizers in the spring rather than the fall. “There will be times when food prices will go up next year or maybe already now. The effects on actual production won’t be visible until next year, ”said Hansen.

Julien Denormandie, French Minister of Agriculture – another major producer of fertilizer – told reporters that he fully supports the Polish statement and fears that the rise in fertilizer prices, coupled with EU plans under of the Green Deal to remove land from production in the name of biodiversity, could threaten food security not only in Europe but worldwide.

“Beyond the effect on prices, my fear is the impact on quantities, on volume, on the ability to feed everyone on this planet,” he said in response to a comment. question from POLITICO.

Polish Agriculture Minister Grzegorz Puda warned on Friday that if fertilizer prices continued to rise, it could lead to “a food price crisis across Europe which can lead to an economic crisis as well as a social crisis “.

No windfall for farmers

EU agriculture ministers, from Italy’s Stefano Patuanelli to Germany’s Julia Klöckner, have in the past criticized what they see as very low food prices, especially for meat. European farmer lobbies regularly take to the streets, accusing retailers and processors of skimming profits from the food chain.

At the Luxembourg meeting, there was a sense of pessimism that even if farmers bear more costs, they will not see greater benefits even if food prices rise. Even grouped together in producer organizations, farmers often do not have the bargaining power to confront powerful processing companies who buy their products, as the tumult this year in France has demonstrated over a law. on the food chain.

“It would just mean more pressure on farmers,” said a government official from a central European country who preferred not to be named.

Slovenian farm manager Jože Podgoršek also stressed that, especially in the pigmeat sector, it would be impossible for farmers to recover their extra costs: “The prices of raw materials are increasing, as well as fertilizers, while a on the other hand, the price of pork is drastically dropping.

Belgium won the support of 18 countries at the meeting to declare a “crisis” in the pigmeat sector. (There is an excess of pork in Europe, in part because China has blocked imports from major EU producers like Germany over fears of African swine fever, creating a glut.)

If farmers feel the pinch, tractors are likely to hit the streets of the bloc in protest.

Wojciechowski, agricultural patron of the EU noted the Commission is developing a “toolbox” to help countries cushion the shock of soaring energy prices, including on fertilizers. He gave few technical details on what the future toolbox will do, promising that the Commission will continue to analyze the situation.

He argued that an unexpected benefit of more expensive fertilizers could be that farmers are turning away from artificial fertilizers and using more animal manure, in line with the Green Deal, which sets a target for reducing chemical fertilizers.

“This is the direction for the future, but of course we have to react for now,” he said.

This article is part of POLITICSThe premium police service: Pro Energy and Climate. Whether it’s climate change, emissions targets, alternative fuels and more, our specialist journalists keep you up to date on the topics driving the energy and climate policy agenda. E-mail [email protected] for a free trial.

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