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Fertile Futures: Scenario Analysis on the Interconnected Dynamics of Fertiliser and Agricultural Markets

Marcel Adenäuer, Edith Laget and Merritt Cluff

No 207, OECD Food, Agriculture and Fisheries Papers from OECD Publishing

Abstract: Fertilisers are crucial components of food systems, with impacts beyond agricultural markets. This study utilises the OECD-FAO Aglink-Cosimo model to examine the intricate interplay between fertiliser markets, policies, and their repercussions on agricultural markets, food security, and environmental sustainability over the medium term. Two distinct scenario analyses reveal significant insights. The first scenario shows that while short-term disruptions in fertiliser supply can be mitigated by existing stocks, prolonged deficits will increase global food prices by up to 6%, posing long-term threats to agriculture. In the second scenario, the removal of fertiliser subsidies in India leads to reduced domestic use, resulting in decreased agricultural production and exports coupled with increased imports. Although this will cause a modest 0.8% increase in global food prices, it will substantially cut agricultural greenhouse gas emissions by 7 million tonnes of CO2 equivalent, highlighting the pivotal role of domestic policies in attaining global environmental sustainability goals.

Keywords: Agricultural support; Food security; Greenhouse Gas (GHG); Partial equilibrium modelling (search for similar items in EconPapers)
JEL-codes: C54 Q11 Q17 Q18 Q56 (search for similar items in EconPapers)
Date: 2024-04-24
New Economics Papers: this item is included in nep-agr and nep-env
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