Here are some sources on the fertilizer and economic crisis caused by the Ukraine war:
* Commission acts to safeguard global food security and support EU farmers and consumers
* Commission approves €836 million Polish scheme to support agricultural sector in context of Russia’s invasion of Ukraine
* World’s Second-Largest Steelmaker Closes European Plant
* How gas rationing at Germany’s BASF plant could plunge Europe into crisis
* Fertilizers Europe on EU industries shutting down
The crisis is caused by the reduction in food being exported from Ukraine, due to the war, and from Russia, due to sanctions. Even though food and fertilizer from Russia are not sanctioned, exports of those items have been greatly reduced. First, banks will not transfer payment to Russia to pay for anything, as they fear sanctions. Second, shippers are reluctant to ship, in case the shipment also includes sanctioned items. Then shippers do not ship without insurance, which companies refuse to provide. So heavy sanctions on most items cause a chilling effect on non-sanctioned items.
Also, when the U.S. and E.U. and U.K. heavily sanction Russia, and then try to buy non-sanctioned items, Russia might be reluctant to provide those items. It is a bizarre form of diplomacy when nations issue heavy sanctions on a nation, supply many weapons to the other side of a war with that nation, and then expect to be able to buy fuel, food, and fertilizer from the same nation.
As for the EU plan to pour hundreds of billions of Euros into agriculture, fertilizer, and energy production — this has no effect on supply. When prices rise due to low availability, giving all major buyers money does nothing to availability. It only encourages prices to go higher — which benefits Russia. The world is one tightly-woven economic and food system. When the West does not buy Russian (and Belarussian) fertilizer, prices go higher, Russia then sells to other buyers and makes more money. Sanctions and accompanying actions by companies and govt’s have consequences that may well undermine the goal of the sanctions.
Whatever the goal or actions taken regarding sanctions, food production for the whole world must be safeguarded. It is not moral in warfare to starve a city by putting it under a long siege. Sanctions are not moral IF they have the effect of starving any population. In the case of Russia, they have plenty of national food resources, so sanctions do not have that effect. However, the EU is facing a food crisis:
Food production requires fertilizer. EU new regulations make it impossible to sell fertilizer in the EU. Literally impossible. The “Fertilizers Europe” industry group has stated: “Since August , the European fertilizer industry is facing an unprecedented crisis with extremely high gas prices forcing some 70% of European ammonia production to standstill. Ever since, industry has been calling on the EU and Member States to undertake urgent corrective measures.” They also stated that a large portion of the manufacturing industry in the EU has been forced to shut down or greatly scale back production, due to high energy prices. And when the fertilizer industry asked for help from the EU, there were “green strings attached to the proposed support” — meaning fertilizer production would not continue, unless it met stringent environmental goals.
Money is not food. You can’t eat money. Giving out vast amounts of money to farmers and companies does not increase the supply of fertilizer or food. The world fertilizer production system is a “just in time” economy, which has little excess production and little storage capability. Nitrogen fertilizer is made from natural gas and nitrogen in the air. Lower availability or higher prices for natural gas causes lower use of fertilizer, resulting lower crop yields and LESS FOOD. One cannot put environmental or political concerns above food production.
If the West wins their proxy war in Ukraine against Russia, only to suffer a collapse of the food and manufacturing economies, that is not a win. Politicians seem not to realize that sanctions are harming the sanctioning nations more than the targeted nations (Russia and its allies). Russia is wrong to invade Ukraine, but the West cannot defend Ukraine by shooting itself in the foot.
If Russia loses the war in Ukraine, they might decide to wage an economic war against the nations that sanctioned Russia and gave weapons to Ukraine. They should not do so, but we have to consider also what they might do, even if they should not.
Russia supplies a vast amount of essential goods to the West:
* nickel and other metals for batteries
* uranium for nuclear power plants
* nitrogen, phosphorus, potassium for fertilizer (NPK)
* food crops
* oil, natural gas, coal
The West cannot expect to fight Russia in a proxy war, issue heavy sanctions, and then buy whatever we like from them. And without Russian goods, the Western economy could face a severe crisis.