The Russia-Ukraine war, the reactionary sanctions placed on Russia and the ensuing supply disruptions are not the only factors at play, according to Adinova Fauri, an economist at the Center for Strategic and International Studies in Indonesia.
“The increase in fertilizer prices has also occurred because of increased pressure on commodity prices due to the economic recovery after the COVID-19 crisis, including ingredients in the fertilizer itself,” he said. “Another issue is inward-looking policies which are occurring all over the world, such as China also banning fertilizer exports. [This] is increasingly adding pressure on the world’s supply and causing prices to continue to rise.”
Experts say there is little farmers can actually do to battle rising fertilizer prices. The escalation is particularly hard on owners of palm plantations as oil palm fruit is harvested year-round. This means the soil in which it grows needs to be carefully monitored and cared for so that it does not become depleted.
“Oil palm needs a lot of maintenance,” said Uli Arta Siagian, a forestry and plantations campaigner at the environmental nonprofit WALHI. “Every three months you have to give it fertilizer. If you don’t fertilize enough, then yields can be disappointing, so farmers are forced to have to buy fertilizer if they want to take care of their crops and ensure a good quality product.”
Siagian added that while the government has offered to subsidize fertilizer in some cases, smallholder farmers often do not benefit from such largesse as it does not trickle down to the village level. “The state should be able to guarantee the price of fertilizer and fertilizer supplies,” Siagian told Nikkei. “And we shouldn’t be reliant on other countries for such products when we have the potential to produce our own.”
Farmers could use the current situation to swap out chemical fertilizer for more eco-friendly organic fertilizer, but doing so, Siagian said, would require another kind of commodity, patience. “[We] need farmers who are ready to wait longer,” she said. “However, farmers need to make pragmatic choices.”
In Jambi Province on the island of Sumatra, Vincentius Haryono, who owns a 4-hectare plantation, said the price of fertilizer has risen from around 300,000 rupiah per 50 kg to more than 800,000 rupiah.
“If we can’t afford to buy fertilizer or can’t find it,” Haryono said, “then we need to find other kinds of fertilizer like organic compost, which is 2,000 rupiah per kilogram. But it is not optimal, especially for oil palm, which needs a lot of potassium.”
East Kalimantan farmer Wawan says his future is bleak if fertilizer prices do not start to stabilize.
“In the end what will happen is that farmers will decide not to use fertilizer anymore and not take care of their plantations properly,” he said. “This means production will decrease and cause problems with supply. Perhaps not now but in the next year we will notice that the quality of fresh fruit bunches has declined and that farmers are not able to harvest as much palm fruit.”
Indonesia is the largest producer of palm oil. If harvests in the nation fall because of a lack of fertilizer, the chain reaction could disrupt global supply chains all over again, Siagian, the forestry and plantations campaigner, said.
“In the future,” she said, “new wars will not be about countries bombing each other but about fights for energy, food and water.”
