The conflict in the Middle East is hitting British farmers just as they prepare for the spring planting season. Prices of essential inputs such as fuel and fertiliser have soared, adding to the financial pressures on the agricultural sector.
James Cox, who runs a 230-hectare arable farm in Gloucestershire, says that while he has secured his supplies for now, many others have not. “Not everybody will have got all the fertiliser they need, because of their finances and poor prices on the grain market,” he said.
About a third of global seaborne fertiliser trade passes through the Strait of Hormuz, now effectively closed due to the conflict. The UN Conference on Trade and Development reports that Egyptian urea prices, a key benchmark, have risen by more than 45% to $700 a tonne. Britain’s farmers use around 1 million tonnes of synthetic nitrogen each year, and half of global food production depends on such fertilisers.
The rising costs are expected to drive up prices of household staples such as bread, pasta and potatoes, with analysts at Jefferies predicting food price inflation could accelerate by the end of the year. Many farmers are already struggling with tight cashflow after the phase-out of the Basic Payment Scheme in England, replaced by the Sustainable Farming Incentive.
Environment Secretary Emma Reynolds has said the new system will be “fairer”, but the timing of the cost increases has added to concerns about profitability. Cox noted that historically farmers used the December basic payment to buy fertiliser, but that is no longer available, leaving many exposed.
