EU introduced policies to ease the impact of fertilizer price increases

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On July 8, the European Parliament voted to adopt supporting policies aimed at alleviating the operating pressure on local farmers caused by soaring fertilizer prices. Member States can adjust the prepayment rate of direct agricultural subsidies from 70% to 75%, which can be paid after farmers submit their applications, without waiting for the current regulation of October 16. Countries also have greater authority to adjust the budget for direct agricultural subsidies for the following year. The bill was passed by 576 votes to 62, with 15 abstentions. The bill also needs to be formally approved by the Council of the European Union and published in the official gazette before it enters into force the day after its publication.

The European Parliament rapidly approved the temporary revision of the common agricultural policy submitted by the European Commission to ensure that farmers can get subsidies in time to purchase the fertilizer needed to next season's planting. In order to prevent agricultural production reduction, decline in the condition of agricultural items and increase in the price of terminal food, farmers can apply to a working capital subsidy of up to 80% of the additional fertilizer purchase cost.

The EU's application on foreign fertilizers is high, with imports of nitrogen fertilizer, phosphate fertilizer, and potash fertilizer accounting to 30%, 70%, and 40% respectively. regional fertilizer production is highly dependent on natural gaseous, however gaseous prices have continued to rise in recent years. The Strait of Hormuz has been hampered this year, with about 35 per cent of global nitrogen fertilizer shipments passing through the channel, leading to a sharp spike in fertilizer prices.

The European Commission has issued a fertilizer response plan in might 2026, taking into account immediate farmer assistance and medium-and prolonged supply chain autonomy and sustainable utilization of nutrient recycling. This urgent revision of agricultural policy is the implementation of the immediate financial relief initiative in the program.

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