The true cost of biofuels and the spiraling prices of the fertilisers needed to produce them.

An interesting article in The Australian examined the emergence of Australian wheat farmers from drought and highlighted the new problem stifling potential “bumper crops”, the issue of rising fertiliser costs.

This problem appears to be a common one across the globe as fertiliser production has failed to keep pace with demand for crops, not only for food, but as alternative energy sources such as for the biofuels boom. The prices of food and fuel have become entwined in a way never experienced before. The rise in returns has fueled the move away from traditional food crops to biofuel potential crops such as maize. The problem with this has been the increased fertilizer need for optimising yields and fertiliser manufacturers not being able to keep pace with this. As well as the increase in demand, the problem also lies in the limited sources for fertilisers. Thomas Hargrove of EurekaAlert reported recently that:

“Phosphate fertilizers are produced in the United States, Morocco, and along the Baltic Sea. Canada produces 70% of the world’s muriate of potash. But plants to manufacture urea, for which natural gas is the main raw material resource, are dispersed worldwide. The world is currently short of urea, but global production may increase because at least six large new urea plants are projected to open in 2008: two in Iran and one each in Egypt, Nigeria, Oman, and Russia.”

Hargrove reports that “global fertiliser prices rose more than 200 percent in 2007 as farmers applied more fertiliser to maximise production of corn, now used for ethanol, at record prices; hardest hit are the African farmers who need fertiliser to replenish nutrient depleted soils.”

Here are a few of the statistics that Hargrove reported:

The price for diammonium phosphate (DAP) has almost tripled a year rising to $752 by January 2008.

Similarly, the price of prilled urea rose from $272 to $415 per ton in the same period, and the Vancouver price of muriate of potash (MOP) rose from $172 to $352.

An interesting graph he included is linked here for reference.

Back in Australia, The Australian quotes the price of monoammonium phosphate, or MAP, as having doubled, from abbout $600 a tonne last year to $1100 or $1200 a tonne this year. Glyphosate (known as Roundup) was $4 a litre last year, and it is $12 now.

The Australian points out that fertilisers vie with fuel for the biggest input cost into farming, followed by chemicals. It quotes ABARE estimates that farmers will spend $2.2 billion on fertiliser and $1.7 billion on chemicals. So the problem of shortages is a significant one.

Hargrove reports that fertilizer use in Africa is the world’s lowest—about 8 kg per hectare. The lack of fertilizers in Africa and in the developing countries accentuates hunger and poverty.

In a previous post (8 Feb) I reported that research had found that“biofuel production of commonly used biofuels such as biodiesel from rapeseed and bioethanol from corn (maize), depending on the N fertilizer uptake efficiency by plants, can contribute as much or more to global warming by N2O emissions, than to cooling by fossil fuel saving.” Other research also indicated that farmers are responding to higher prices by burning and plowing huge areas of forest and grassland to convert them to cropland. That not only releases more greenhouse gases but also deprives the earth of natural “sponges” that absorb carbon emissions. The inefficient use of fertilisers coupled with the damage done by the very diversion of land to subsidised biofuel production is not only unhelpful in arresting climate change, but also impacting on the food security of the poorest nations of the world.

It can be seen then, that if food prices are to be disentangled from the spiraling prices of biofuels we must evaluate the true value of biofuels in arresting climate change. If other energy sources like natural gas are being diverted to fertiliser production to support these crops hard questions must be asked about the true cost of biofuels. If, as Dennis Avery, Director of the Center for Global Food Issues at the Hudson Institute, U.S.A., points out, Brazilian sugarcane yields 3.6 units of energy per unit of energy invested while corn yields only 1.2 units, then the world must also examine the opportunity cost of the various crops being used for biofuel. Also required is more research into efficient use of scarce resources used in fertiliser production.

The cost for some farmers in the world and their customers may not be about profit but about but about life and survival itself.

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~ by abstraktbiblos on Sunday, 9 March, 2008.

One Response to “The true cost of biofuels and the spiraling prices of the fertilisers needed to produce them.”

  1. […] Andrew Austin […]

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