The Global Fertilizer Crisis: Scaling Digital Tools and Farm-Gate Solutions

The combination of the global shortage in natural gas, higher energy costs due to the war in Ukraine and the resulting sanctions on major fertilizer-producing countries, has led to a fertilizer crisis that is being felt by farmers across the globe, from Europe to Southeast Asia. The crisis has been heralded as yet another impetus, adding to climate change, to decrease agriculture’s reliance on fossil fuels, particularly in input production.

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Some companies are seizing the opportunity to ramp up production of ‘green fertilizers’, produced using renewable energy. Other companies are developing innovations to decrease the carbon footprint of agricultural production, to help support the scaling up of regenerative agriculture.

In this session, Grow Asia will bring to the table a diversity of perspectives on this crisis, to discuss the following framing questions:

• How are farmers in Southeast Asia perceiving and understanding the fertilizer crisis?

• Is this crisis an opportunity to harness the impact of digital tools that can play a role in helping small-scale producers to use fertilizers more efficiently?

• More broadly, could this crisis help to build momentum around using digital tools and other innovations to facilitate a smoother transition for small-scale producers to adopt regenerative agriculture practices

Guest Blog

Addressing the Global Fertilizer Crisis through Scaling Innovation for Smallholder Farmers

By David Shearer, Managing Director, The Agri-vation Effect

Grow Asia’s third Digital Learning Series session of 2022 on “The Global Fertilizer Crisis: Scaling Digital Tools and Farm-Gate Solutions” explored the implications, impacts, and potential of smallholder-focused solutions. With half the world’s food supply reliant on fertilizers - and the manufacturing of these fertilizers dependent on non-renewable energy - there is significant pressure to transform the sector into one that is more resilient and “green”. The session provided an opportunity to bring together the private sector, entrepreneurs, academics, and policy makers to discuss the short, medium, and long term issues within the sector.

The session attracted participants from across the region and from as far afield as Africa, reflecting that this is truly a global crisis with people looking for effective solutions. 90% of those involved believe this is a medium to long-term issue. In addition, participants indicated that the greatest impact will be on smallholder farmers and food prices in Asia, potentially affecting more vulnerable members of the population. When stakeholders were asked their view on the required actions to lower fertilizer prices there was a broad range of actions identified, including ending the Russian-Ukraine conflict, developing alternative energy supplies for fertilizer manufacturing, developing lower costs production approaches and decreasing agricultural systems’ reliance on manufactured inputs. Surprisingly, participating stakeholders did not believe more effective government subsidies are likely to contribute to lowering fertilizer prices.

As innovation is a key to transforming future food systems and will play an important role in responding to the global fertilizer crisis, the webinar started with presentations from two innovative companies – AgroCares, represented by Tanja Luebbers, who provides digital tools to support better decision making in fertilizer management and Kelp Blue, represented by Valentin Pitiot, an offshore giant kelp grower that stores carbon and produces plant bio-stimulants.

During the panel discussion, Werner Prinsloo from Yara International outlined the important role Yara is playing throughout the sector to ensure they are using best practice and accessing the best decision support tools to develop healthier soil ecosystems. Werner also highlighted the important strategic investment Yara is making in green fertilizer that can reduce the carbon footprint of manufacturing by 90%.

Dr. Nguyen Huu Nhuan from Vietnam’s National Agricultural University and VietDHRRA emphasised the need to have smallholder farmers at the centre of our thinking when we design investment and interventions and ensure that they play an active role in how projects and programs are implemented.

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What would a transition to a greener fertilizer sector in Asia require and who else needs to be involved?

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The basis of a more sustainable, greener fertilizer sector in Asia is reasonably simple – fertilizer manufacturing needs to move from emission intensive to net zero, transportation of fertilizer from point of manufacturing to application location needs to be net-zero, the on-farm use of fertilizers needs to efficient and effective, without run-off, leaching or other environmental impacts. Government policies need to support the required innovation and capacity, and continue the open movement of goods and services, including finance and intellectual property.

In the transition to a greener fertilizer sector both global manufacturers and SMEs will continue to play an important role. Due to size, market position and ability to invest in research and innovation it is critical that global manufacturers be supported to develop net-zero manufacturing capacity – they will be the drivers of future supply. They will need to establish manufacturing facilities where large amounts of renewable energy is available at low cost in a consistent manner – this is already starting to happen.

SMEs will need support to benefit from the insights gained at the global level, position themselves in future renewable energy hubs and be entrepreneurial to take greatest advantage of the emerging opportunities, including lower transportation-related emissions.

More efficient and effective fertilizer use on-farm that minimises environmental impact and climate change is essential. Smallholders need greater capacity and access to the best-performing decision support tools. There are emerging innovations that support better farmer decision making for fertilizer use, such as those from AgroCares. The development and use of these decision-support tools should be enhanced with a push to get them into the hands of smallholder farmers and enable their use to be maximised.

Although fertilizers will be part of the future food system, effort should also be made to increase soil carbon (which helps in nutrient exchange and also may provide financial opportunities if effective carbon markets are in place) and look at opportunities with bio-actives, such as those being developed by Kelp Blue. The opportunity to develop bio-actives may be a suitable focus for start-up and other entrepreneurial approaches and should be encouraged with both private and public investment.

Governments play a crucial role as well. They need to ensure the free movement of innovation in both goods and services and to build the capacity of smallholder farmers in an equitable manner. They also need to support research, innovation and entrepreneurship, and invest in impact pathways that scale innovation, in order to get the right tools in the hands of capable farmers to enable the best possible decision-making.

Sustainable agricultural transformation in Southeast Asia may sound simple to some, but it will be difficult. It will require collaboration and commitment from a range of stakeholders like those we had on the panel brought together by networks of ecosystem builders and enablers like Grow Asia.

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