Fertilizer, soil health, and economic shocks: A synthesis of recent evidence

Most countries, at all stages of development, adopt policies to improve agricultural productivity through the application of inorganic fertilizer and the management of soil health. Unfortunately, global and local economic shocks can quickly erode the impact of these policies, as was evident during the global food, fuel, and fertilizer price crisis that began in 2020. This paper synthesizes recent evidence on the magnitude and distribution of—and responses to— the recent shocks to international fertilizer markets, building on evidence from this Special Issue of Food Policy and other recent contributions to the literature. The available evidence suggests that although international fertilizer prices increased dramatically in 2020–2022 and remained above their pre-COVID-19 pandemic level through 2024, the medium-term effects on global fertilizer demand were relatively modest. However, global aggregates obscure important short-term effects, including reduced fertilizer use and lower farm profits in smallholder production systems in many low- and middle-income countries. Although these effects varied considerably by country, dependence on fertilizer imports and vulnerability to idiosyncratic domestic shocks likely played a key role in driving these effects. The evidence synthesized in this paper reveals varying responses (across countries and farmers) and patterns of price transmission (across local and international markets) while also highlighting the potential of fertilizer subsidy programs and other policy interventions to mitigate the effects of fertilizer price volatility and improve soil health, particularly in the midst of a climate crisis that adds uncertainty to agricultural production. From a longer-term perspective, much research is still needed to unpack the effects of this crisis—and the possible effects of future crises—on the international transmission of fertilizer price shocks, policy response options to both immediate shocks and more protracted threats, farm-level strategies to increase resilience to these shocks and to encourage more judicious fertilizer use and soil health management.