EU Offers Emergency Support to Farmers Amid Fertiliser Price Surge from Iran War
By Kate Abnett
EU Response to Fertiliser Price Surge
BRUSSELS, May 19 (Reuters) - The European Commission set out plans on Tuesday to offer extra emergency funds to farmers struggling with soaring fertiliser costs triggered by the Iran war, and to consider stockpiling supplies to prevent future price shocks.
Impact of the Iran War on Fertiliser and Gas Prices
The disruption of shipments through the Strait of Hormuz has hiked prices for fertilisers and the natural gas used to produce them. Before the U.S.-Israeli war with Iran, up to a third of global fertiliser trade passed through the Strait.
Europe is highly exposed as a major importer of both fertilisers and gas, and the EU fears high prices could disrupt planting this year, having a knock-on impact on food production.
Commission's Emergency Support Measures
Increased Emergency Reserve in the Common Agricultural Policy
The European Commission will propose emergency support to help the hardest-hit farmers "before summer", by increasing the size of an emergency reserve in the EU's Common Agricultural Policy, it said.
Financial Details and CAP Budget
The Commission proposal did not specify how much money it would make available. The overall CAP, the EU's massive farming subsidy programme, has a budget of 387 billion euros.
Short-Term Support and Investment Incentives
Brussels will also propose rules to let governments free up more short-term support for farmers from their share of the CAP by making advance payments or backing investments that reduce reliance on standard fertilisers, by curbing overall use or switching to bio-based ones instead.
Long-Term Strategies for Fertiliser Security
Stockpiling Fertilisers
The Commission also said it would look into the option of stockpiling fertilisers to shore up supplies against future crises.
Alternative Fertiliser Options
Use of Digestate
The EU will also consider stepping in to let farmers use digestate - a high-nutrient byproduct of biogas, the use of which is restricted by EU nitrogen emissions limits, it said.
Environmental Concerns
Environmental campaigners have urged Brussels not to weaken its nitrogen emissions law, warning that this would unleash more pollution and health costs, if excess nitrates leak into groundwater supplies.
Recent Changes to State Aid Rules
The EU already changed its state aid rules last month to let governments spend more on subsidising companies hit by higher fertiliser costs.
(Reporting by Kate Abnett; Editing by )
