ADRIAN FLORIDO, HOST:
The war with Iran may soon make it a lot tougher for people around the world to afford food. A new report published by the Food and Agricultural Organization of the United Nations details how the closure of the Strait of Hormuz is not only choking the global oil market. The organization's chief economist, Maximo Torero, says it's also disrupted the flow of fertilizers from the Gulf, which many countries depend on for agriculture.
MAXIMO TORERO: They are exported to Africa, to Asia intensively, but also to South America for Brazil, for example.
FLORIDO: He warns the fertilizer deficit will lead to a severe global food crisis within 6 to 12 months. I spoke with Torero and asked him how countries most dependent on fertilizer from the Gulf are dealing with the shortage.
TORERO: So the countries that are dependent are trying to look other sources, but there is not really a major alternative that they could use. So they are making decisions, and the decisions that they have to make - the farmers of those countries - is to plant with less inputs or to plant less or to move to commodities like soybeans. And that means that the yields in the world will be affected for the second half of the year for 2027.
FLORIDO: So then explain how these decisions that farmers are making now translates into a crisis half a year from now.
TORERO: Today, we are in a situation where farmers have low prices, and their costs are increasing significantly. So if I have low prices, and I have such a less jump in cost (ph), then of course my activity becomes less profitable or not profitable. So I have to make a decision. And the possible decisions are I plant the same with less inputs, I plant less, I switch to crops that can fix more nitrogen, or I move to other commodities.
FLORIDO: To be clear, is the problem here that the food is just going to get so expensive that many people won't be able to afford to buy it? Or is it, there may not actually be enough food being produced to feed everyone who needs to eat?
TORERO: So today, we have enough food available, and we have enough stocks. The problem is for the next harvest. For the next harvest, as we move towards the middle of the year and the end of the year, we will have less supply, less stocks, and as a result, higher prices. And this will exacerbate more next year if this situation doesn't stop. If the situation improves tomorrow, if you open the Strait of Hormuz tomorrow, we will still have higher prices because of less supply, because farmers already made a decision, but we could avoid a significant crisis by the end of the year or 2027.
FLORIDO: It is unclear when the war in the Middle East may end, but if it continues to drag on, what can be done in the meantime to help curtail the negative impacts of fertilizer shortages?
TORERO: In the short term, essentially, the most important is to avoid export restrictions of energy and fertilizers. And in the long term, the major importance is to learn that we need to diversify infrastructure, and we need to find and transform the agri-food system to be more diverse in terms of energy.
FLORIDO: How hard is it to get countries to coordinate some of the solutions and recommendations that you are suggesting? - finding new routes for fertilizer to travel, for example.
TORERO: Look, countries are doing it by themselves. They don't need to coordinate. And also wherever I go to a country that there is a supply that was not already exporting, you see countries coming to look for it. You see Australia going to a country in Africa to try to find these inputs. You see other countries going to Uzbekistan. So I think markets are being searched, and countries have learned a little bit. We have been through COVID-19. We have been through the war in Ukraine. So countries are trying to move fast. But again, the benefit - the result is marginal, no?
FLORIDO: Maximo Torero is chief economist of the U.N.'s Food and Agriculture Organization. Thank you, Mr. Torero.
TORERO: Thank you. A pleasure. Transcript provided by NPR, Copyright NPR.
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