Question to the Department for Environment, Food and Rural Affairs:

To ask the Secretary of State for Environment, Food and Rural Affairs, what assessment he has made of the current capacity of the European nitrogen production industry to meet the needs of British agriculture.

Due to the increase in cost of natural gas across the globe, the cost of production of nitrogen-based fertiliser types has increased significantly. It has also affected Europe and the global market with some fertiliser companies halting or reducing production due to high input costs.

Fertiliser supply in Britain is resilient. Britain sources both nitrogen-based and non-nitrogen fertiliser from a wide range of countries and produces ammonium nitrate fertiliser domestically, although prices are volatile caused by fluctuating gas prices. Domestic and imported nitrogen-based fertiliser prices dropped from May after their peak in March, coinciding with annual lower summer gas prices.

The fertiliser market has been flexible in continuing to source nitrogen-based fertiliser from the global market, and we understand from continued engagement with the sector that many farmers have switched their preferred nitrogen-based fertiliser from ammonium nitrate to urea and inhibited urea, reflecting the lower cost per tonne of nitrogen for crops. Although we have historically sourced most ammonium nitrate from Europe, other countries such as Algeria and Egypt are major sources of other nitrogen-based fertiliser such as urea.

Defra hosts Fertiliser Taskforce meetings with key industry figures including the National Farmers Union, the Agriculture and Horticulture Development Board. We are continuing to monitor the security and stability of fertiliser and other supply chains, and work closely with colleagues across HM Government and devolved administrations as well as industry figures through the Taskforce.

To support farmers the Basic Payment Scheme payment will be made in 2 instalments to give farmers greater financial fluidity. Other actions taken include changes to guidance on farmers using manures, increased grants for farmers and growers, boosting research and development, and a delay to changes to the use of urea by at least a year. When the urea restrictions are introduced, they will be related to the use of ammonia inhibitors rather than a complete ban.

Defra is committed to promoting the use of less environmentally damaging fertilisers and better nutrient use efficiency. The efficient use of organic fertilisers can complement the use of mineral fertilisers, whilst reducing input costs. We know many farmers already use organic fertiliser to complement their nutrient management planning.