Fuel shortage due to Iran
By Arun Debnath, Manolo Serapio Jr., Ben Westcott and Eleanor Thornber
With food crops becoming increasingly vulnerable due to an energy supply crisis caused by the war in West Asia, farmers across Asia and Europe are facing shortages of the fuel needed to run essential machinery.
Australian grain growers are facing fuel delivery cuts ahead of the planting season. In Bangladesh, some rice farmers can’t secure diesel to power irrigation pumps, while fishermen in the Philippines may soon need to anchor their boats to shore. A prolonged supply crisis would increase food bills and raise global concerns about inflation resulting from the conflict.
“As soon as we start to crack, every tractor and piece of machinery will be running, busy, gulping diesel,” said Richard Heady, a farmer in Buckinghamshire, Britain. “By the middle of spring, we will run out of whatever we have and we will have to work hard and pay whatever the rate is – if we can make it.”
Two weeks after the US-Israeli war with Iran, attacks on energy infrastructure across the Middle East and the effective closure of the Strait of Hormuz have blocked the flow of crude oil, liquefied natural gas and fertilizer. Farmers are paying more for crop nutrients while access to key export markets has been cut off for some.
Now, fuel shortage is posing another major hurdle. Modern agriculture is an energy-intensive industry, relying on large amounts of fuel to power machinery used for sowing, harvesting, and caring for animals in vast pastures. Without this supply, agricultural calendars crafted over generations could be easily disrupted.
If farmers cannot get enough diesel, sowing may be delayed or reduced. Mature crops left in the ground will spoil, while the costs of processing and transporting the produce after harvest will also increase.
“We don’t see this as a flash in the pan,” said Paul Jull, farm-input analyst at Rabobank in Sydney. “There will be long-term inflation issues on the input side, and obviously the burden of that could ultimately be passed on to the consumer.”
The Asia-Pacific region is particularly dependent on goods shipped from West Asia. Even as governments take steps to cap prices or cut usage, consumers rush to buy fuel, leaving industries like farming vulnerable to fuel shortages.
Irrigation equipment in much of Bangladesh – vital to the rice crop – runs on diesel-powered engines that draw groundwater, and the government has begun limiting daily supplies to 2 liters per person. Harprosad Roy, a farmer from the North Rangpur area, said his two-acre farm requires at least 3 liters of water per day – but he often returns with only one liter from the pump.
About 40 percent of agricultural land in the region depends on these machines, Roy said, and – with harvest starting next month – switching to electric motors will involve a lengthy process of securing government permits. “There is no one to help the farmers,” he said, putting Bangladesh’s largest crop of Boro rice at risk.
In the Philippines, rice farmer Jesper Villegas typically rents a harvester machine during the collection season that starts this month and pays for it with about a 10th of his harvest. “But due to high diesel prices owners will definitely ask for more,” he said, which will reduce the amount he can sell as he is struggling with the tuition fees of his three children.
Rice is a staple food item in the Philippines, which – despite its two annual yields – ranks as the world’s largest importer. Meanwhile, in Thailand, some farmers fear that rising fuel costs mean gathering crops will no longer be economically viable, said Abhi Agarwal, co-founder of Living Roots, an agriculture company in Chiang Mai.
Fishermen are also struggling, losing about 500 pesos ($8.40) a day in the Philippines due to rising diesel costs, Jason Canglet, executive director of the SINAG farmers’ group, told a Senate hearing on Thursday. Subsidies are being considered for about two weeks from now, he said – but by then the boats will not be in the water.
Elsewhere, fuel shortages may reduce the amount farmers can plant. Farmers in Australia are preparing for winter grain planting, while much of Europe is preparing spring crops such as barley and corn.
Australian farmers are “increasingly struggling to secure fuel”, the National Farmers Federation said this week, with persistent price rises meaning some acreage could go unfilled. Livestock farmers are also vulnerable, as they need to make regular deliveries of fodder for cattle or transport milk to market.
Rhys Turton, president of farmer and industry group Grain Growers Ltd., said that in Western Australia, the country’s largest grain-growing and exporting region, some fuel suppliers are delivering less than what farmers have ordered ahead of wheat and barley plantings starting in about a month.
“A lot of them are rationing that fuel, so they’re trying to spread it throughout the farming community,” Turton said. He said he expects the supply chain to return to normal in two to four weeks. “Otherwise,” he said, “as we go into planting season, we’ll have some serious problems.”
In Germany, farmers have to pay an extra €30 ($34) per 100 liters of fuel — and large tractors use about 250 liters on busy spring days, said Heinrich Wendorf, president of the Brandenburg state farmers’ association. Agricultural diesel prices in Romania have also increased by about 25 percent since the war began, said Gabriel Razi, an analyst at the consulting firm AgroBrain.
UK-based farmer Headey stocked up on diesel last year, but will need to buy more in about a month. The bigger danger from higher prices, he said, is the risk that not enough fuel will be available. “If we don’t have the fuel to provide nutrients and disease-protection to crops, they could fail, putting us at risk,” he said.
