EJP SOIL SIMPLE D2.2 Higher fertilizers prices. The case of European Union, Sweden and Switzerland

This study analyzes how changes in fertilizer prices affect the consumption of fertilizers and agricultural production. We present three case studies: (1) the European Union (EU), (2) Sweden, and (3) Switzerland. For the EU case study, we rely on country-level data from 24 EU countries. For the Swedish case, we use regional-level data from 21 Swedish regions and for the Swiss case, we use the Information System of Structural Change in Switzerland/StrukturWandel InformationsSystem Schweiz (SWISSland) model.

The results of the EU case study show that EU farmers rely to a large extend on mineral nitrogen fertilizers, with no signs of gradual reduction as consumption fluctuates periodically over the past 22 years. Moreover, farmers' consumption is ‘inelastic’ to changes in fertilizer prices, indicating a strong dependency on mineral nitrogen fertilizers. However, the level of dependency can vary according to the geomorphological and climatic characteristics of the agricultural system. The Swedish case confirms the findings from the EU, with Swedish farmers exhibiting a similar relationship between fertilizer consumption and price changes. The results of the Switzerland case study show that projected changes in fertilizer prices do not significantly impact agricultural production, as fertilizer costs constitute only a small share of total farm costs. However, a substantial increase in fertilizer prices (e.g., a tenfold increase) does raise farming costs and subsequently impacts agricultural production.