Raising agricultural productivity through farm inputs is the only sustainable answer to the current food crisis

Vienna, Austria, 20 May 2008 – Speaking at the opening of the 76th Annual Conference of the International Fertilizer Industry Association (IFA), IFA President Thorleif Enger said: “We need to feed people today, but we should also be making it possible for them to feed themselves in the future.”

The present food crisis has boosted public awareness of the importance of agriculture and of the role of the fertilizer industry. This creates a unique opportunity to forge strong public-private partnerships to significantly improve food production, particularly in countries with suboptimal farming practices.

There is an urgent need to resolve the present food crisis with targeted short-term measures. The world’s poor are in need of quick fixes, but Enger cautioned that such responses could create more problems than solutions. He emphasized that emergency procurement is the responsibility of governments, donors and international organizations. The fertilizer industry is and should be focused on eliminating production and logistical bottlenecks in the short term in order to stretch current supplies of crop nutrients. Looking ahead, industry should be leveraging its current revenue stream to invest in additional capacity and logistical infrastructure in order to support greater agricultural productivity in the future.

He also stressed that any subsidized distribution of fertilizers or other inputs should be channelled through private sector networks. He cited the case of Malawi where farmers use vouchers to obtain their inputs through local retailers, providing the basis for lasting rural development and a sustainable agricultural market.

Enger cautioned that procuring large quantities of fertilizers could further raise prices and potentially displace the problem from one country to another. Corrective measures should therefore be carried out by governments who have the means and resources to offset unintended consequences through policy adjustments.

Enger noted that governments must manage the transition wisely. Short-term measures to limit food exports and bring sharp decreases in the prices of agricultural commodities could be devastating for commercial farmers who buy inputs at the current high prices and then find themselves unable to earn enough to pay back the associated credit. There is a direct link between farmers’ incomes and their ability to produce more food. In contrast, attempts to mandate lower food prices discourage farmers from increasing their output. Steps must be taken to help people affected by the food crisis. However it is vital to allow food prices to remain above the prevailing prices of the past few decades, so that farmers have the means and incentive to invest in enhanced productivity.

Enger also stated that the current situation highlights the importance of increasing global crop nutrient use efficiency. As well as stretching the existing supply, this benefits the environment and increases farmers’ profitability -- reasons oft-cited for promoting better management of fertilizers and other sources of crop nutrients.

There is a pressing need for governments and donors to prioritize agricultural productivity. This applies particularly in the developing world, where agriculture is key to eliminating poverty and bringing about growth. The contribution of fertilizers can only be fully realized if governments invest in providing market institutions and infrastructure, agricultural research and extension services to promote the adoption of best management practices and innovative technologies.

Enger also addressed the numerous market factors that have sharply increased the prices of fertilizer in recent months.

“Current fertilizer prices are an illustration of the basic principles of supply and demand. They reflect a properly functioning, but very tight, global market,” he stressed. “In fact, many energy and commodity sectors have experienced similar price trends, but they are under less scrutiny because their products are not directly linked to food production.”

Full text of Thorleif Enger's remarks

International Crop Nutrition Award

On the same occasion, the 2008 IFA International Crop Nutrition Award was presented to Dr. Achim Dobermann, Deputy Director General for Research of the International Rice Research Institute (IRRI), for promoting the ecological intensification of rice, maize and soybean production systems in many countries. Given the current food situation, Dr. Dobermann’s work on rice, a staple food for about two-thirds of the global population, is particularly relevant.