The new plan is not only intended to save the financial liquidity of farms, but also also make Europe independent from imports of key raw materials.
Although EU officials reassure us that the physical availability of fertilizers on the market is not currently at risk, their prices keep food producers awake at night. The problem is global and results directly from the structure of EU imports.
As much as 30 percent EU demand for nitrogen fertilizers comes from abroad, and their production is an extremely energy-intensive process, dependent on natural gas prices. The situation is even worse in the case of phosphate fertilizers, where imports of phosphate rocks – mainly from Morocco – cover as much as 70%. EU demand. Potash is slightly better, with imports accounting for 40% and the rest covered by mining, among others. in Germany and Spain.
The scale of the problem is perfectly understood by the authorities in Brussels, which was confirmed by Tuesday's speech at the European Parliament in Strasbourg.
— We are aware of the sharp increase in fertilizer prices. The agricultural sector is under pressure. We are monitoring the situation closely: the sharp increase in prices does not affect a single farm, but the entire food supply chain – warns the deputy head of the European Commission, Raffaele Fitto, on Tuesday.
Financial drip before the holidays
Details of the announced rescue package are to be presented before the holidays. The main goal of the EC is to immediately provide farms with greater financial liquidity before the next production season.
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Brussels plans to give member states the green light for a much broader and more flexible use of funds from national CAP plans. The key proposals include facilitating the payment of advances for farmers and special financial incentives. They are intended to encourage farmers to dosage drugs more effectively and dynamically switch to biological fertilizers.
The EU revolution: nitrogen recovery and less bureaucracy
The European Commission's long-term plan assumes a profound transformation of the market. The EU wants to break with import dependence by stimulating domestic production and developing the circular economy. Organic and bio-based fertilizers are to appear in the fields to a greater extent. Interestingly, Brussels focuses on modern technologies for recovering nitrogen and phosphorus from sewage and agricultural waste, as well as on investments in biogas and biomethane.
For the plan to succeed, The EC announced a ruthless fight against bureaucracy and market barriers that have so far hampered the development of EU producers. These activities will be coordinated by a newly established partnership that will bring together fertilizer producers, farmers and representatives of Member States. Together, they will develop mechanisms that will stabilize prices and supplies on the European market once and for all.
