An overview of fertilizer An overview of fertilizer situation in the context of situation in the context of

food crisesfood crises

Market friendly ways to Market friendly ways to address fertilizer access by address fertilizer access by

farmersfarmers

World fertilizer pricesWorld fertilizer prices

OutlookOutlook

• Fertilizer prices cannot be expected to fall Fertilizer prices cannot be expected to fall until a new investment cycle reaches fruition until a new investment cycle reaches fruition and supply again matches demand. Even and supply again matches demand. Even then, after 3 or 4 years, nitrogen fertilizer then, after 3 or 4 years, nitrogen fertilizer prices will remain high if the energy prices prices will remain high if the energy prices continue to hover at their current level. continue to hover at their current level.

• Similarly, phosphate fertilizers, particularly Similarly, phosphate fertilizers, particularly diammonium phosphate (DAP), will remain diammonium phosphate (DAP), will remain high due to higher costs of quality phosphate high due to higher costs of quality phosphate rock and sulfur. rock and sulfur.

Grain pricesGrain prices

Cereal yields in different Cereal yields in different regionsregions

Per-Hectare Fertilizer Use by Markets Per-Hectare Fertilizer Use by Markets

and Economic Regions, 2005/06 (kg/haand Economic Regions, 2005/06 (kg/ha))

177

165

158

127

109

109

105

99

96

90

85

64

62

42

24

24

7Sub-Saharan Africa

Eurasia

Africa

South Africa

Oceania

Central America

Developed Countries

Latin America

North America

South America

North Africa

United States

World

Developing Countries

Eastern Europe

Western Europe

Asia

Developing Markets Developed Markets

Transitional Markets Economic Regions

World

Intervention strategyIntervention strategy

• Farmers access to improved seed and fertilizer at Farmers access to improved seed and fertilizer at affordable prices together with technology adoption, affordable prices together with technology adoption, human capacity improvement, and access to trade human capacity improvement, and access to trade credit provide the most rapid means of productivity credit provide the most rapid means of productivity response and supply chain development and are response and supply chain development and are appropriate to this crisis situation.appropriate to this crisis situation.

• Supply chain infrastructure investment in research, Supply chain infrastructure investment in research, transportation, and services are also required but are transportation, and services are also required but are longer term in nature.longer term in nature.

• The objective of any fertilizer crisis intervention should The objective of any fertilizer crisis intervention should now be to attempt to at least maintain fertilizer use at now be to attempt to at least maintain fertilizer use at previous levels while encouraging or at least not previous levels while encouraging or at least not disrupting progress made toward competitive market disrupting progress made toward competitive market system build over years with donors investment system build over years with donors investment

Fertilizer Price in KyrgyzstanFertilizer Price in Kyrgyzstan

Fertilizers importation through Fertilizers importation through private sectorprivate sector

102030405060708090

100

2006 2007 2008 Janyary-June Fertilizer 83,7 84,5 95

83,7 84,595

10

00

/Mt

Quantity of imported fertilizers to Kyrgyzstan

Fertilizer Requirements for Fertilizer Requirements for Kyrgyzstan-2008 in MtKyrgyzstan-2008 in Mt

2008 Requirements: 2008 Requirements: 228,500 228,500

Breakdown by types of fertilizer:Breakdown by types of fertilizer:

• Nitrogen- 133,000 Nitrogen- 133,000

• Phosphate- 59,000 Phosphate- 59,000

• Potassium- 36,000Potassium- 36,000

Imported: 95,000 (41, 6% of needs)Imported: 95,000 (41, 6% of needs)

Negative balance: Negative balance: 133,500133,500

Sustainable land Sustainable land managementmanagement• Sustainable land management can only be achieved Sustainable land management can only be achieved

through the judicious use of both organic and through the judicious use of both organic and inorganic fertilizer materials. inorganic fertilizer materials.

• Integrated Soil Fertility Management (ISFM) practices Integrated Soil Fertility Management (ISFM) practices implemented by IFDC in different parts of the World implemented by IFDC in different parts of the World has demonstrated that when smallholder farmers has demonstrated that when smallholder farmers utilize locally available organic matter and apply utilize locally available organic matter and apply sufficient plant nutrients in the form of mineral sufficient plant nutrients in the form of mineral fertilizers, threefold increases in crop yields can be fertilizers, threefold increases in crop yields can be obtained in a cost-effective manner with value: cost obtained in a cost-effective manner with value: cost ratios above 3.5 and farm incomes increased by 70%.ratios above 3.5 and farm incomes increased by 70%.

Integrated Soil Fertility Management: Effect Integrated Soil Fertility Management: Effect of Integrated Use of Fertilizer and Soil of Integrated Use of Fertilizer and Soil Amendments Improves in TimeAmendments Improves in Time

t/hat/haISFM

control

year

www.ifdc.org

Wheat fields with no and fertilizer Wheat fields with no and fertilizer applicationapplication

Fertilizer and yields of main Fertilizer and yields of main cropscrops

Fertilizer and Farmers’ Fertilizer and Farmers’ incomesincomes

Evolution of Maize Yield in Maize+NPK/ + Crop Rotation Schemes

0

1000

2000

3000

4000

5000

6000

7000

8000

2005 2006 2007

Evolution of Wheat Yield in Wheat+NPK/ + Crop Rotation Schemes

0

1000

2000

3000

4000

5000

6000

7000

2005 2006 2007

Suggestions:Suggestions:

• More investment (both short and More investment (both short and long term) is needed by donors to long term) is needed by donors to address agri input shortage and address agri input shortage and further develop input marketsfurther develop input markets

• Food crises should not be considered Food crises should not be considered out the context of long term out the context of long term agricultural development in agricultural development in KyrgyzstanKyrgyzstan

Market friendly approaches to address Market friendly approaches to address fertilizer shortage in short term run-fertilizer shortage in short term run-VouchersVouchers• Input voucher programs are a pro-poor, Input voucher programs are a pro-poor,

market-friendly means of providing either market-friendly means of providing either direct “market-smart” subsidies or crop direct “market-smart” subsidies or crop production credit to resource-poor farmers production credit to resource-poor farmers or ensuring emergency market recovery or ensuring emergency market recovery

• Integral characteristics of voucher Integral characteristics of voucher programs are the provision of technical programs are the provision of technical assistance and training to both the assistance and training to both the recipient farmers and private sector agro-recipient farmers and private sector agro-dealers and the targeting of voucher dealers and the targeting of voucher recipients. recipients.

• The vouchers are not used just to supply The vouchers are not used just to supply free or subsidized fertilizer or other inputs free or subsidized fertilizer or other inputs

Suggestion for long term Suggestion for long term investment in fertilizer sectorinvestment in fertilizer sector• Feasibility study in construction a Feasibility study in construction a

Nitrogen fertilizer plant in southern Nitrogen fertilizer plant in southern KyrgyzstanKyrgyzstan

• Building a fertilizer blending facility Building a fertilizer blending facility (Blended fertilizer in addition to higher (Blended fertilizer in addition to higher nutrient values is cheaper on nutrient nutrient values is cheaper on nutrient basis)basis)

• Phosphate rock deposits (Studies and Phosphate rock deposits (Studies and analysis done by IFDC)analysis done by IFDC)

Thank you!Thank you!