Spain urges billions for EU farmers to ease fertiliser shock

The European Union will need to provide farmers with several billion euros of funding to prevent crop cutbacks following a surge in fertiliser costs caused by the Iran war, Spain Agriculture Minister Luis Planas said.

Spain is leading individual country efforts to ease the blow with a €500 million (S$743.4 million) aid package, while the European Commission’s current plans have yet to address funding needs, Mr Planas said in an interview. 

“The European Commission’s fertiliser plan is a good analytical document, but it does not address the immediate objective: the extra cost,” he said. “The money is needed at the right moment and, for now, we have provided the missing leg of the European plan.”

Farmers worldwide are under pressure from soaring energy and fertiliser costs, with prices for the most widely used nitrogen fertiliser up more than 65 per cent since the start of the Iran war at the end of February.

The Persian Gulf region has become a major producer of the crop input in recent decades, with about a third of global supplies shipped through the Strait of Hormuz before the conflict.

The European Commission presented a plan in May aimed at helping farmers cope with rising fertiliser prices and shortages by boosting the bloc’s production and reducing dependence on imports. Mr Planas believes the proposal will not be enough to avoid crop losses in 2026.

Mr Planas estimates Spain’s agricultural industry will need to disburse an extra €760 million in 2026 to cover the impact of the war, based on a 33 per cent price increase in fertiliser prices since February.

EU countries are even more dependent on foreign supplies than Spain, which imports roughly 30 per cent of its nitrogen fertilisers, 70 per cent of phosphates and 50 per cent of potash, he added.

Spain produces about a fourth of Europe’s fresh vegetables supply and is also a major grain supplier. BLOOMBERG