The NFU is looking to GrowHow to rise to the challenge of ensuring a fair and competitive fertiliser market in the UK after recent falls in the price of oil and urea. The call to pass on this market reduction to farmers and growers comes ahead of the AIC conference today.
NFU President Peter Kendall said: "Back at the Cereals event in the summer, I laid down a challenge to GrowHow to be transparent with producers about the reasons behind fertiliser price rises. Now I make a new challenge to GrowHow.
"There is every likelihood that given falling commodity prices, ammonium nitrogen should be able to follow this same trend in the New Year. We hope that GrowHow accepts their responsibility as the UK’s sole domestic manufacturer of fertiliser and provides full communication and transparency to farmers and growers.
"The economic downturn has seen oil prices fall to less than $60 a barrel, and we have seen urea, which historically influences the trend for ammonium nitrate prices, plummet over the past month. I accept there are complicating factors regarding forward contracts and a lack of responsiveness to crude oil price shifts in gas prices, but there remains a strong expectation from the agricultural industry that fertiliser prices will fall in the New Year.
"If that does not happen, there will be significant disquiet and inquisition. It will raise questions of competitiveness and transparency if ammonium nitrate prices remain high when urea has fallen below £280 per tonne," said Mr Kendall.
He will also call for help for producers in coping with volatility, including more use of contracts, better understanding of ways to tackle price risks and further consolidation to boost competitiveness.
"We need to see continuous efforts by both buyers of farm produce and the supply industries to ensure that farmers can operate as competitively as possible. Contracts can help smooth volatility by underwriting more stable, predictable prices - the dedicated retail contracts we see in the dairy sector are a prime example of how this can work.
"In terms of price risk, the direction of agricultural policy means there will be an increasing need to understand the way this risk can be managed, and the financial and trade instruments available to this. This knowledge takes time to be diffused, so preparation for a time when markets are even less protected must start now."
Mr Kendall will emphasise that while the challenges of food security set against global population expansion and a declining availability of agricultural land must be fully recognised in Government policy making, the NFU rejects the notion that this should be at the expense of the environment.
"I would like to set the record straight: we care about the protection of our soils, we care about climate change, and we care about biodiversity. Some NGOs live under a misapprehension that farmers couldn’t give a stuff about the environment - this is simply ridiculous.
"However, we do want to avoid a situation where Government implements flawed policies such as an environmental set aside measure, which will inhibit farmers in delivering greater food security, come at massive bureaucratic cost and fail to address issues like the decline in certain farmland bird species. That, as I said recently, would be plain bonkers," said Mr Kendall.
