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close this bookBriefs for Food, Agriculture, and the Environment - 2020 Vision : Brief 1 - 64 (IFPRI)
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View the document2020 BRIEF 1 - AUGUST 1994: ECONOMIC GROWTH AND DEVELOPMENT
View the document2020 BRIEF 2 - AUGUST 1994: WORLD SUPPLY AND DEMAND PROJECTIONS FOR CEREALS, 2020
View the document2020 BRIEF 3 - AUGUST 1994: WORLD PRODUCTION OF CEREALS, 1966-90
View the document2020 BRIEF 4 - AUGUST 1994: SUSTAINABLE FARMING: A POLITICAL GEOGRAPHY
View the document2020 BRIEF 5 - OCTOBER 1994: WORLD POPULATION PROJECTIONS, 2020
View the document2020 BRIEF 6 - OCTOBER 1994: MALNUTRITION AND FOOD INSECURITY PROJECTIONS, 2020
View the document2020 BRIEF 7 - OCTOBER 1994: AGRICULTURAL GROWTH AS A KEY TO POVERTY ALLEVIATION
View the document2020 BRIEF 8 - OCTOBER 1994: CONSERVATION AND ENHANCEMENT OF NATURAL RESOURCES
View the document2020 BRIEF 9 - FEBRUARY 1995: THE ROLE OF AGRICULTURE IN SAVING THE RAIN FOREST
View the document2020 BRIEF 10 - FEBRUARY 1995: A TIME OF PLENTY, A WORLD OF NEED: THE ROLE OF FOOD AID IN 2020
View the document2020 BRIEF 11 - FEBRUARY 1995: MANAGING AGRICULTURAL INTENSIFICATION
View the document2020 BRIEF 12 - FEBRUARY 1995: TRADE LIBERALIZATION AND REGIONAL INTEGRATION: IMPLICATIONS FOR 2020
View the document2020 BRIEF 13 - APRIL 1995: THE POTENTIAL OF TECHNOLOGY TO MEET WORLD FOOD NEEDS IN 2020
View the document2020 BRIEF 14 - APRIL 1995: AN ECOREGIONAL PERSPECTIVE ON MALNUTRITION
View the document2020 BRIEF 15 - APRIL 1995: AGRICULTURAL GROWTH IS THE KEY TO POVERTY ALLEVIATION IN LOW-INCOME DEVELOPING COUNTRIES
View the document2020 BRIEF 16 - APRIL 1995: DECLINING ASSISTANCE TO DEVELOPING-COUNTRY AGRICULTURE: CHANGE OF PARADIGM?
View the document2020 BRIEF 17 - MAY 1995: GENERATING FOOD SECURITY IN THE YEAR 2020: WOMEN AS PRODUCERS, GATEKEEPERS, AND SHOCK ABSORBERS
View the document2020 BRIEF 18 - MAY 1995: BIOPHYSICAL LIMITS TO GLOBAL FOOD PRODUCTION
View the document2020 BRIEF 19 - MAY 1995: CAUSES OF HUNGER
View the document2020 BRIEF 20 - MAY 1995: CHINA AND THE FUTURE GLOBAL FOOD SITUATION
View the document2020 BRIEF 21 - JUNE 1995: DEALING WITH WATER SCARCITY IN THE NEXT CENTURY
View the document2020 BRIEF 22 - JUNE 1995: THE RIGHT TO FOOD: WIDELY ACKNOWLEDGED AND POORLY PROTECTED
View the document2020 BRIEF 23 - JUNE 1995: CEREALS PROSPECTS IN INDIA TO 2020: IMPLICATIONS FOR POLICY
View the document2020 BRIEF 24 - JUNE 1995: REVAMPING AGRICULTURAL R&D
View the document2020 BRIEF 25 - AUGUST 1995: MORE THAN FOOD IS NEEDED TO ACHIEVE GOOD NUTRITION BY 2020
View the document2020 BRIEF 26 - AUGUST 1995: PERSPECTIVES ON EUROPEAN AGRICULTURE IN 2020
View the document2020 BRIEF 27 - AUGUST 1995: NONDEGRADING LAND USE STRATEGIES FOR TROPICAL HILLSIDES
View the document2020 BRIEF 28 - AUGUST 1995: EMPLOYMENT PROGRAMS FOR FOOD SECURITY IN SUB-SAHARAN AFRICA
View the document2020 BRIEF 29 - AUGUST 1995: POVERTY, FOOD SECURITY, AND THE ENVIRONMENT
View the document2020 BRIEF 30 - JANUARY 1996: RISING FOOD PRICES AND FALLING GRAIN STOCKS: SHORT-RUN BLIPS OR NEW TRENDS?
View the document2020 BRIEF 31 - APRIL 1996: MIDDLE EAST WATER CONFLICTS AND DIRECTIONS FOR CONFLICT RESOLUTION
View the document2020 BRIEF 32 - APRIL 1996: THE TRANSITION IN THE CONTRIBUTION OF LIVING AQUATIC RESOURCES TO FOOD SECURITY
View the document2020 BRIEF 33 - JUNE 1996: MANAGING RESOURCES FOR SUSTAINABLE AGRICULTURE IN SOUTH ASIA
View the document2020 BRIEF 34 - JUNE 1996: IMPLEMENTING THE URUGUAY ROUND: INCREASED FOOD PRICE STABILITY BY 2020?
View the document2020 BRIEF 35 - JULY 1996: SOCIOPOLITICAL EFFECTS OF NEW BIOTECHNOLOGIES IN DEVELOPING COUNTRIES
View the document2020 BRIEF 36 - OCTOBER 1996: RUSSIA'S FOOD ECONOMY IN TRANSITION: WHAT DO REFORMS MEAN FOR THE LONG-TERM OUTLOOK?
View the document2020 BRIEF 37 - OCTOBER 1996: UNCOMMON OPPORTUNITIES FOR ACHIEVING SUSTAINABLE FOOD AND NUTRITION SECURITY - An Agenda for Science and Public Policy
View the document2020 BRIEF 38 - OCTOBER 1996: WORLD TRENDS IN FERTILIZER USE AND PROJECTIONS TO 2020
View the document2020 BRIEF 39 - OCTOBER 1996: REDUCING POVERTY AND PROTECTING THE ENVIRONMENT: THE OVERLOOKED POTENTIAL OF LESS-FAVORED LANDS
View the document2020 BRIEF 40 - OCTOBER 1996: POLICIES TO PROMOTE ENVIRONMENTALLY SUSTAINABLE FERTILIZER USE AND SUPPLY TO 2020
View the document2020 BRIEF 41 - DECEMBER 1996: STRUCTURAL CHANGES IN THE DEMAND FOR FOOD IN ASIA
View the document2020 BRIEF 42 - MARCH 1997: AFRICA'S CHANGING AGRICULTURAL DEVELOPMENT STRATEGIES
View the document2020 BRIEF 43 - JUNE 1997: THE POTENTIAL IMPACT OF AIDS ON POPULATION AND ECONOMIC GROWTH RATES
View the document2020 BRIEF 44 - JUNE 1997: LAND DEGRADATION IN THE DEVELOPING WORLD: ISSUES AND POLICY OPTIONS FOR 2020
View the document2020 BRIEF 45 - JUNE 1997: AGRICULTURE, TECHNOLOGICAL CHANGE, AND THE ENVIRONMENT IN LATIN AMERICA: A 2020 PERSPECTIVE
View the document2020 BRIEF 46 - JUNE 1997: AGRICULTURE, TRADE, AND REGIONALISM IN SOUTH ASIA
View the document2020 BRIEF 47 - AUGUST 1997: THE NONFARM SECTOR AND RURAL DEVELOPMENT: REVIEW OF ISSUES AND EVIDENCE
View the document2020 BRIEF 48 - FEBRUARY 1998: CHALLENGES TO THE 2020 VISION FOR LATIN AMERICA: FOOD AND AGRICULTURE SINCE 1970
View the document2020 BRIEF 49 - APRIL 1998: NUTRITION SECURITY IN URBAN AREAS OF LATIN AMERICA
View the document2020 BRIEF 50 - JUNE 1998: FOOD FROM PEACE: BREAKING THE LINKS BETWEEN CONFLICT AND HUNGER
View the document2020 BRIEF 51 - JULY 1998: TECHNOLOGICAL OPPORTUNITIES FOR SUSTAINING WHEAT PRODUCTIVITY GROWTH TOWARD 2020
View the document2020 BRIEF 52 - SEPTEMBER 1998: PEST MANAGEMENT AND FOOD PRODUCTION: LOOKING TO THE FUTURE
View the document2020 BRIEF 53 - OCTOBER 1998: POPULATION GROWTH AND POLICY OPTIONS IN THE DEVELOPING WORLD
View the document2020 BRIEF 54 - OCTOBER 1998: FOSTERING GLOBAL WELL-BEING: A NEW PARADIGM TO REVITALIZE AGRICULTURAL AND RURAL DEVELOPMENT
View the document2020 BRIEF 55 - OCTOBER 1998: THE POTENTIAL OF AGROECOLOGY TO COMBAT HUNGER IN THE DEVELOPING WORLD
View the document2020 RESUMEN No. 56 - OCTUBRE DE 1998: AYUDA A LA AGRICULTURA EN LOS PAÍSES EN DESARROLLO: INVERSIONES EN LA REDUCCIÓN DE LA POBREZA Y NUEVAS OPORTUNIDADES DE EXPORTACIÓN
View the document2020 BRIEF 57 - OCTOBER 1998: ECONOMIC CRISIS IN ASIA: A FUTURE OF DIMINISHING GROWTH AND INCREASING POVERTY?
View the document2020 BRIEF 58 - FEBRUARY 1999: SOIL DEGRADATION: A THREAT TO DEVELOPING-COUNTRY FOOD SECURITY BY 20207
View the document2020 BRIEF 59 - MARCH 1999: AGRICULTURAL GROWTH, POVERTY ALLEVIATION, AND ENVIRONMENTAL SUSTAINABILITY: HAVING IT ALL
View the document2020 BRIEF 60 - MAY 1999: CRITICAL CHOICES FOR CHINA'S AGRICULTURAL POLICY
View the document2020 BRIEF 61 - MAY 1999: LIVESTOCK TO 2020: THE NEXT FOOD REVOLUTION
View the document2020 BRIEF 62 - OCTOBER 1999: NUTRIENT DEPLETION IN THE AGRICULTURAL SOILS OF AFRICA
View the document2020 BRIEF 63 - NOVEMBER 1999: PROSPECTS FOR INDIA'S CEREAL SUPPLY AND DEMAND TO 2020
View the document2020 BRIEF 64 - FEBRUARY 2000: OVERCOMING CHILD MALNUTRITION IN DEVELOPING COUNTRIES: PAST ACHIEVEMENTS AND FUTURE CHOICES
View the document2020 BRIEF 65 - MARCH 2000: COMBINING INTERNAL AND EXTERNAL INPUTS FOR SUSTAINABLE INTENSIFICATION

2020 BRIEF 38 - OCTOBER 1996: WORLD TRENDS IN FERTILIZER USE AND PROJECTIONS TO 2020

Balu L. Bumb and Carlos A. Baanante

Balu L. Bumb is a senior scientist in economics and Carlos A. Baanante is director of the Research and Development Division, International Fertilizer Development Center, in Muscle Shoals, Alabama, U.S.A.

Fertilizers have played an important role in increased crop production, especially in cereal yields, and will continue to be a cornerstone of the science-based agriculture required to feed the expanding world population. Fertilizers replenish the nutrients removed from soils by harvested crops, encourage adoption of high-yielding varieties, and increase biomass in the nutrient-poor soils of the tropics.

FERTILIZER USE UNTIL THE 1990s

Global fertilizer use increased at an annual rate of 5.5 percent from 27.4 million nutrient tons in 1959/60 to 143.6 million tons (in this paper, all tons are nutrient tons) in 1989/90. Over the next five years, it decreased by 20 million tons. In all developing regions, fertilizer use increased significantly, during 1960-90, at annual rates ranging from 8 percent in Latin America and Sub-Saharan Africa to 12 percent in South Asia (Table 1).

In contrast to the higher annual growth rates of the 1960s (8.9 percent) and the 1970s (5.6 percent), growth in global fertilizer use was slow in the 1980s (2.8 percent) due to low grain prices and land set-aside programs in the developed countries and debt crises, foreign exchange shortages, and removal of subsidies in some African and Latin American countries. In the early to mid-1990s, fertilizer use actually declined by 3.1 percent a year, primarily due to reduced consumption in Eurasia (the former Soviet Union) and Eastern Europe, where fertilizer use and crop production suffered from the economic reform process. As economic recovery begins in these countries, global fertilizer use may increase, but overall growth in the 1990s may continue to be slow, picking up after the turn of the century.

Although the use of all three nutrients - nitrogen, phosphate, and potash - increased during 1960-90, nitrogen use grew much faster. In 1994/95, nitrogen fertilizers accounted for 64 percent of the fertilizers consumed by developing countries, phosphate for 25 percent, and potash for 11 percent. This emphasis on nitrogen has contributed to nutrient imbalances in many developing countries.

In 1959/60, the developing countries used less than 3 million tons of fertilizer nutrients, most of it on export crops (Table 1). The launching of the Green Revolution In the mid-1960s in India and subsequently in other East and South Asian countries accelerated the growth in fertilizer use in developing countries. Fertilizer use increased in both developed and developing countries, but the developing countries recorded substantially higher annual growth rates (10.5 percent), albeit from a small base, increasing their share of global fertilizer consumption from 10 percent in 1959/60 to 31 percent in 1979/80 and 58 percent in 1994/95. East Asia consumes half of the fertilizer used in the developing world. Despite appreciable annual growth, Sub-Saharan Africa accounts for less than 1 percent of global fertilizer use and 2 percent of the developing-country total.

In East and South Asia, 66 to 72 percent of total fertilizer use goes to food crops, a result of a high degree of political commitment to food production and a favorable policy environment for adoption of seed-fertilizer technologies. In contrast, Latin American and Sub-Saharan African countries devote a relatively larger share of fertilizer use to export crops. East and South Asia also dominate other developing regions in fertilizer use intensity. In 1994/95, fertilizer use per hectare averaged more than 216 kilograms in East Asia and 77 kilograms in South Asia, compared with 10 kilograms in Sub-Saharan Africa and 65 kilograms in Latin America (Figure 1).

Table 1 - Fertilizer use, 1959/60, 1989/90, and 2020


Fertilizer Use

Annual Growth

Region/Nutrient

1959/60

1989/90

2020

1960-90

1990-2020


(million nutrient tons)

(percent)

Developed countries

24.7

81.3

86.4

4.0

0.2

Developing countries

2.7

62.3

121.6

10.5

2.2


East Asia

1.2

31.4

55.7

10.9

1.9


South Asia

0.4

14.8

33.8

12.0

2.8


West Asia/North Africa

0.3

6.7

11.7

10.4

1.9


Latin America

0.7

8.2

16.2

8.2

2.3


Sub-Saharan Africa

0.1

1.2

4.2

8.3

3.3

World total

27.4

143.6

208.0

5.5

1.2

Nitrogen

9.5

79.2

115.3

7.1

1.3

Phosphate

9.7

37.5

56.0

4.5

1.3

Potash

8.1

26.9

36.7

4.0

1.0

Sources: FAO data, and authors' calculations for 2020
Notes: East Asia excludes Japan West Asia/North Africa excludes Israel

PRODUCTION TRENDS

To meet the growing demand, fertilizer production increased rapidly from 27.7 million tons in 1959/60 to 152.9 million tons in 1989/90, then decreased by about 17 million tons over the next five years, largely because of the reduction in fertilizer production in countries of Eurasia and Eastern Europe. Based on the current projections for production capacity, global fertilizer supply may reach 157 million tons (86.7 million tons of nitrogen, 41.5 million tons of phosphate, and 28.8 million tons of potash) by the year 2000.


Figure 1 - Fertilizer use per hectare in selected regions, 1994/95

Source: Derived from FAO data on fertilizer assumption and land use.

TRENDS IN PRICES

Since the early 1980s, fertilizer prices have been declining in real terms (Figure 2) and were not high enough to attract additional investment in fertilizer production. But recent increases in fertilizer use in North America, reduced supplies from Eurasia, and increased imports by China and India forced fertilizer prices to rise rapidly in 1994 and 1995. Increased grain prices also contributed to this unexpected surge in fertilizer prices. Although this phenomenon has engendered some alarm about potential fertilizer shortages, the structural parameters do not support a long-run trend to higher prices. Nevertheless, restoring the fertilizer sector to viable operating conditions in Eurasia is essential for sustaining stability in the global pricing environment.

PROJECTED TRENDS IN USE, REQUIREMENTS, AND PRODUCTION

By 2020, global fertilizer demand is projected to increase to 208 million tons - 86 million tons in developed countries and 122 million tons in developing countries (Table 1). In all regions, fertilizer demand is projected to grow at a slower pace than it did in the past. These lower growth rates reflect a higher base, limited potential for further growth, and changing policy environments. Because of the already high application rates, environmental concerns, reduction in farm support programs, and trade liberalization policies, fertilizer use in developed countries is projected to increase only modestly. In East Asia, existing high application rates minimize the potential for future growth. Most of the growth in East Asia will be in phosphate and potash fertilizers, which will contribute to improved nutrient balance and reduced loss of nitrogen to the atmosphere. In other developing regions, demand for all nutrients is expected to grow by 2 to 3 percent a year.

The projected fertilizer demand in developing countries is expected to fall short of the amount needed by 2020 to meet goals for food security (estimated at 185 million tons) and sustainable agriculture (251 million tons for resource conservation and nutrient replenishment). Hence, additional efforts must be made to promote higher levels of fertilizer use, especially in Sub-Saharan Africa. Assuming that the long-term elasticity of cereal output to fertilizer use is 0.4 to 0.5, a 4 percent annual growth rate in cereal production in Sub-Saharan Africa may mandate an annual increase in fertilizer consumption of 8 to 10 percent, in contrast to the projected annual growth rate of 3.3 percent.

To meet the projected demand of 208 million tons in 2020, about 51 million tons of additional capacity (28.6 million tons of nitrogen, 14.5 million tons of phosphate, and 7.9 million tons of potash) will be needed. Technology, raw materials, and capital resources are unlikely to be constraints to meeting future needs. East Asia, South Asia, Latin America, and Sub-Saharan Africa are likely to be the major importing regions, whereas North America, Eurasia, and West Asia/ North Africa will remain the major exporting regions. Macro-economic policy (including exchange rate stability and an adequate supply of foreign exchange) will play a critical role in meeting the fertilizer requirements of the importing regions, especially Sub-Saharan Africa, where most countries currently depend on aid to meet fertilizer requirements. Overall, a conducive and stable policy environment, including macroeconomic stability, price incentives, credit availability, efficient organizational arrangements, research and extension support, regulatory frameworks, and environmental monitoring, will be essential to promote environmentally friendly growth in fertilizer use and supply to 2020.


Figure 2 - World fertilizer prices, 1980-95

Source: World Bank, Commodity Markets and the Developing Countries, February 1996.
Note: Urea prices are f.o.b. bagged Western Europe, and diammonium phoshate (DAP) and muriate of potash (MOP) prices are f.o.b. bulk U.S. Gulf and Vancouver (Canada), respectively. All prices are in 1990 U.S. dollars.