Agricultural Fertiliser and Feed: Rising Costs

Lord Northbrook Excerpts

Wednesday 29th June 2022 Lords Chamber

[Lord Northbrook (Con)]

My Lords, I declare interests as an arable farmer and NFU member.

The war in Ukraine has brought home the importance and fragility of food security for the UK. As an island nation, being able to grow enough food to feed a substantial proportion of our population is a key measure of food security and national resilience. I had not anticipated the Ukraine crisis when I moved an amendment to the Agriculture Bill asking for government support for the domestic production of food and agricultural products. This was voted against by my own party and Labour. I had no great foresight in having been ahead of the game on this issue, as it already seemed to be a pressing matter even before the war.

I will focus my remarks on the fertiliser situation. As already stated, the latest figures from the Agriculture and Horticulture Development Board show that fertiliser prices have more than doubled since May 2021 and imported fertiliser prices are up by 171%.

Fertiliser is a key input related to crop yields. A severe tightening of supply will lead to a reduction in the output of commodities. Gas, the main input in producing fertiliser, and ammonium nitrate play major roles in successful crop growth. Gas prices have increased fourfold over the last year and ammonium nitrate prices have also increased fourfold since January 2021. As a result, fertiliser is in tight supply for 2022, with impacts expected to become more serious next year. The significant increase in cost and reduced physical availability of this key input will likely reduce the crop yield from UK farms in the coming years.

The Government are helping the situation but can do more. I welcome the consultation on reducing ammonia emissions from solid urea fertilisers admitting that a full ban is unfeasible. I am also pleased that the Government made an agreement for one UK fertiliser plant at Billingham to be reopened after both had closed. However, on 8 June CF Fertilisers announced that it intends to close its fertiliser plant in Ince, Cheshire. There were only two plants overall in the UK, so this is a serious problem.

The NFU recommends that the Government and industry help farm businesses to plan for next year’s crop by publishing fertiliser prices. At the moment, I hear from my tenant farmer that they will publish them only daily, due to volatility. The NFU suggests the publishing of a gas fertiliser index; it also recommends mandatory food resilience impact assessments for new regulations or policy. How can the Government help in this regard, and does the Minister agree with the NFU’s proposals?

I welcome the advance payment of this year’s BPS, which will help farmers’ cashflow. I also welcome the recent announcement of some measures to try to support the agriculture industry, including the formation of a market monitoring core group and steps to assist farmers with the availability of fertilisers. The NFU acknowledges parliamentary support for these changes.

What is not helpful are remarks, maybe taken out of context, alleged to have been said by the Minister from the other place. These were that “there is no shortage of organic matter to replace all the manufactured fertiliser we currently use in the UK”. Mike Neaverson, a potato farmer from Lincolnshire, wrote in Farmers Weekly in April:

“Using Defra’s own documents—and ignoring its rules about … spreading it—we can deduce that to replace all the UK’s manufactured nitrogen with manures would require, for example, an extra 2.5 billion laying hens, or 10 million dairy cows. Taking a hybrid of both, this would mean that every man, woman and child in the UK”


would have to have

“an 18-egg omelette, washed down with five pints of whole milk”

every day of the year. Neaverson continued:

“We could eliminate all of our manufactured nitrogen tomorrow but … it would reduce our yields very significantly, to be replaced by imports.”


The Government could take a leaf out of the assistance programme of the US Department of Agriculture, USDA. In March this year, it announced that it would support additional fertiliser production for American farmers to address rising costs. USDA will make available $250 million through a new grant programme this summer to support independent, innovative and sustainable American fertiliser production to supply American farmers. Additionally, to address growing competition issues, USDA will launch a public inquiry seeking information regarding seeds and agricultural inputs, fertiliser and retail markets. The new programme will support fertiliser production that is independent—outside the dominant fertiliser suppliers —increasing competition in a concentrated market. It will support fertiliser made in America, produced by domestic companies in the United States, reducing the reliance on potentially unstable or inconsistent foreign supplies.

One idea I would put to the Minister is assistance for smaller farms in buying fertiliser. The problem comes when banks refuse to increase overdraft facilities to help farmers with this. They then have to decide whether to use less to keep within their banking limits, while facing the uncertainty as to whether crop prices will hold up. Some sort of Covid-type loans would be an important idea here. Will the Minister give this some thought?

Finally, the Government need to wake up to the fact that they are losing support in rural areas, as evidenced by the Tiverton result. Not taking farmers for granted would be a good way to start addressing this, and careful awareness of the fertiliser problem is a hugely important issue. Does the Minister agree?