Farmers Caught in a Cost-Price Squeeze: High Fertilizer Costs, Low Crop Prices Threaten Global Food Security
SOFIA — Farmers worldwide are facing an increasingly untenable financial bind: soaring costs for essential inputs like fertilizers are colliding with stagnant or declining prices for their crops, pushing many to the brink of insolvency. The crisis, exacerbated by geopolitical conflicts, climate change and shifting global trade dynamics, threatens not only the livelihoods of millions of agricultural producers but as well the stability of food supplies in vulnerable regions.
In Europe, where the war in Ukraine disrupted fertilizer markets and sent energy prices skyrocketing, the situation has become particularly acute. Farmers in countries like Bulgaria, Romania, and Hungary report that the cost of nitrogen-based fertilizers has more than doubled since 2021, although the prices they receive for wheat, corn, and other staple crops have failed to keep pace. The result is a widening gap between input costs and revenue—a gap that, if left unaddressed, could lead to reduced plantings, lower yields, and higher food prices for consumers in the coming years.
“We are caught in a vice,” said Ivan Petrov, a fourth-generation farmer in Bulgaria’s Dobrudzha region, where wheat and sunflower are the dominant crops. “Fertilizer prices are through the roof, but the market price for wheat hasn’t moved. If this continues, we’ll have no choice but to cut back on planting—or worse, leave the land fallow.” Petrov’s concerns are echoed by agricultural associations across the continent, which warn that the current cost-price squeeze could have long-term consequences for food security, particularly in regions already grappling with climate-related crop failures.
The Fertilizer Crisis: A Perfect Storm of Geopolitics and Market Forces
The roots of the fertilizer crisis trace back to the early days of Russia’s invasion of Ukraine in February 2022. Russia and Belarus, two of the world’s largest producers of nitrogen, phosphate, and potash fertilizers, faced sweeping international sanctions, disrupting global supply chains. Russia alone accounts for nearly 20% of the world’s nitrogen fertilizer exports and 15% of potash exports, according to the Food and Agriculture Organization (FAO). The loss of these supplies sent shockwaves through global markets, pushing prices to record highs.
While fertilizer prices have since retreated from their 2022 peaks, they remain significantly elevated compared to pre-war levels. In March 2026, the World Bank’s Commodity Markets Outlook reported that the price of urea, a key nitrogen fertilizer, was still 60% higher than in early 2021. Potash and phosphate prices have followed similar trajectories, leaving farmers with few options but to absorb the costs or reduce their employ of fertilizers—a decision that risks lower crop yields and diminished soil health over time.
The crisis has been compounded by rising energy costs, as natural gas is a critical input in the production of nitrogen fertilizers. In Europe, where gas prices spiked following Russia’s reduction of pipeline supplies, fertilizer manufacturers have struggled to maintain production levels. Some plants have idled operations entirely, further tightening supply. The European Commission estimated in late 2025 that EU fertilizer production had declined by 15% over the past two years, forcing the bloc to increase imports from countries like Egypt, Algeria, and the United States.
Crop Prices Lag Behind, Leaving Farmers in the Red
While fertilizer prices have surged, the prices farmers receive for their crops have not kept pace. Global wheat prices, for example, have remained relatively flat since 2022, despite the initial spike caused by the war in Ukraine. The FAO’s Food Price Index, which tracks monthly changes in international prices for a basket of food commodities, shows that wheat prices in April 2026 were roughly 10% lower than their 2022 peak and only marginally higher than pre-war levels. Corn and soybean prices have followed similar patterns, leaving farmers with little relief at the farm gate.
The disconnect between input costs and crop prices is particularly stark in Eastern Europe, where small-scale farmers lack the bargaining power of their counterparts in Western Europe or North America. In Bulgaria, for instance, the average price of wheat in early 2026 was around €180 per ton, down from €220 in 2022, while the cost of nitrogen fertilizer had risen to €600 per ton from €350 over the same period. For farmers like Petrov, whose profit margins were already razor-thin, the math is simple—and devastating.
“We’re not asking for handouts,” said Petrov. “We just need a fair price for our crops. Right now, we’re working for free.” His sentiment is shared by farmers across the region, many of whom have taken to the streets in recent months to protest what they describe as an unsustainable economic model. In Romania, thousands of farmers blocked highways in February 2026, demanding government subsidies to offset rising costs. Similar protests have erupted in Poland, Hungary, and Slovakia, where farmers warn that the current crisis could accelerate the decline of rural communities already struggling with depopulation and aging infrastructure.
Climate Change and Trade Shifts Add to the Pressure
The cost-price squeeze is not occurring in a vacuum. Farmers are also grappling with the escalating impacts of climate change, which are making it increasingly difficult to predict yields and plan for the future. In 2025, Europe experienced its second consecutive year of severe drought, with parts of Spain, France, and Italy recording rainfall levels 30-50% below the long-term average. The drought, coupled with record-breaking heatwaves, led to a 12% decline in EU wheat production compared to 2024, according to the European Commission’s autumn 2025 crop report.
The decline in European production has had ripple effects across global markets. Countries that traditionally relied on European wheat, such as Egypt, Morocco, and Algeria, have been forced to turn to alternative suppliers, including Russia, which has emerged as the world’s largest wheat exporter in recent years. Russia’s ability to undercut competitors on price—thanks in part to lower production costs and a weaker ruble—has position additional downward pressure on global wheat prices, further squeezing farmers in Europe and beyond.
Trade policies have also played a role in exacerbating the crisis. In 2025, the European Union imposed temporary tariffs on fertilizer imports from non-EU countries, including Russia and Belarus, in an effort to protect domestic producers. While the tariffs were intended to stabilize the market, they instead led to higher prices for farmers, who were already struggling with tight supplies. The move drew sharp criticism from agricultural associations, which argued that the EU’s policy was counterproductive at a time when farmers needed access to affordable inputs.
Governments Scramble to Respond, But Solutions Remain Elusive
Faced with mounting pressure from farmers and rising concerns about food security, governments across Europe have begun rolling out emergency measures to mitigate the crisis. In February 2026, the European Commission announced a €1.5 billion package to support farmers, including direct payments to offset rising fertilizer costs and low-interest loans for small-scale producers. The package also included provisions to accelerate the approval of alternative fertilizers, such as those derived from organic waste or recycled materials, which could help reduce dependence on traditional chemical fertilizers.
Individual countries have taken additional steps. Poland, for example, introduced a subsidy program in March 2026 that covers up to 50% of fertilizer costs for small and medium-sized farms. Hungary has temporarily suspended value-added tax (VAT) on fertilizers, while Romania has expanded its state-backed loan program for farmers. Despite these efforts, however, many farmers and agricultural experts argue that the measures are insufficient to address the scale of the crisis.
“The subsidies help, but they’re just a band-aid,” said Maria Stoyanova, an agricultural economist at Sofia University. “What farmers really need is structural change—a shift toward more sustainable farming practices that reduce reliance on expensive inputs, as well as policies that ensure fair prices for their crops. Without that, we’re just kicking the can down the road.”
Stoyanova’s call for systemic change is echoed by environmental groups, which argue that the current crisis presents an opportunity to accelerate the transition to regenerative agriculture. Practices such as cover cropping, crop rotation, and reduced tillage can improve soil health and reduce the need for synthetic fertilizers, they say. However, the transition requires significant upfront investment, which many cash-strapped farmers cannot afford without government support.
The Human Cost: Rural Communities on the Brink
The financial strain on farmers is taking a toll on rural communities, where agriculture is often the primary source of employment and economic activity. In Bulgaria, where nearly 20% of the population lives in rural areas, the number of small farms has declined by 15% since 2020, according to the National Statistical Institute. Many of those who remain are struggling to make ends meet, with some turning to off-farm jobs or even leaving the countryside altogether.
“The countryside is emptying out,” said Georgi Ivanov, a farmer and local councilor in the village of General Toshevo, near Bulgaria’s border with Romania. “Young people don’t want to seize over the family farm because they see no future in it. If this continues, we’ll lose not just farmers, but entire communities.” Ivanov’s concerns are shared by policymakers, who warn that the decline of rural areas could have broader social and economic consequences, including increased urbanization, pressure on social services, and a loss of cultural heritage.
The crisis is also exacerbating inequalities within the agricultural sector. Large agribusinesses, which have greater financial reserves and access to credit, are better positioned to weather the storm than small-scale farmers. In some cases, they are even benefiting from the crisis by purchasing land from struggling farmers at discounted prices. The result is a growing consolidation of farmland, which could have long-term implications for food security and rural livelihoods.
What’s Next? A Looming Food Security Crisis
As the cost-price squeeze continues, experts warn that the consequences could extend far beyond the farm gate. Reduced plantings and lower yields could lead to tighter food supplies, particularly for staple crops like wheat, corn, and rice. The FAO has already warned that global cereal stocks are expected to decline in 2026, raising the risk of price spikes and food shortages in import-dependent countries.
The situation is particularly precarious in Africa and the Middle East, where many countries rely on wheat imports from Europe and Russia. In Egypt, the world’s largest wheat importer, the government has been forced to increase subsidies for bread, a staple food for millions of people. Similar measures have been introduced in Lebanon, Tunisia, and Morocco, where rising food prices have contributed to social unrest in recent years.
For farmers like Ivan Petrov, the path forward remains uncertain. “We’re doing everything we can to keep going,” he said. “But if the prices don’t improve, we may have no choice but to scale back—or walk away entirely. And that’s a loss for all of us.”
Key Takeaways
- Fertilizer prices remain elevated: Despite a retreat from 2022 peaks, nitrogen, phosphate, and potash fertilizers are still significantly more expensive than pre-war levels, driven by geopolitical disruptions and high energy costs.
- Crop prices have stagnated: Global wheat, corn, and soybean prices have failed to keep pace with rising input costs, leaving farmers with shrinking profit margins.
- Climate change is compounding the crisis: Droughts and heatwaves in Europe have reduced crop yields, tightening global food supplies and putting additional pressure on farmers.
- Governments are responding with emergency measures: The EU and individual countries have introduced subsidies, tax breaks, and loan programs to support farmers, but many argue these measures are insufficient.
- Rural communities are at risk: The financial strain on farmers is accelerating the decline of rural areas, with young people increasingly leaving agriculture for other opportunities.
- Food security concerns are growing: Reduced plantings and lower yields could lead to tighter food supplies and higher prices, particularly in import-dependent regions like Africa and the Middle East.
FAQ
Why are fertilizer prices so high?
Fertilizer prices have surged due to a combination of factors, including international sanctions on Russia and Belarus (two of the world’s largest fertilizer producers), rising energy costs (natural gas is a key input for nitrogen fertilizers), and disruptions to global supply chains. While prices have retreated from their 2022 peaks, they remain significantly higher than pre-war levels.
How are farmers coping with the cost-price squeeze?
Many farmers are reducing their use of fertilizers, which risks lower crop yields and diminished soil health over time. Others are cutting back on planting or leaving land fallow. Some have turned to government subsidies or loans, but these measures are often seen as temporary solutions rather than long-term fixes.
What role does climate change play in the crisis?
Climate change is exacerbating the crisis by making it harder for farmers to predict yields and plan for the future. Droughts, heatwaves, and extreme weather events are reducing crop production, particularly in regions like Southern and Eastern Europe. These challenges are increasing the financial strain on farmers, who must invest more in inputs like fertilizers and irrigation to maintain yields.
What are governments doing to address the crisis?
Governments across Europe have introduced emergency measures to support farmers, including direct payments to offset fertilizer costs, low-interest loans, and tax breaks. The European Union has also allocated €1.5 billion to support farmers and accelerate the approval of alternative fertilizers. However, many farmers and experts argue that these measures are insufficient to address the scale of the crisis.
What are the long-term implications of the crisis?
The long-term implications include reduced food security, particularly in import-dependent regions like Africa and the Middle East; the decline of rural communities as young people leave agriculture; and the consolidation of farmland as large agribusinesses acquire land from struggling small-scale farmers. The crisis also presents an opportunity to accelerate the transition to more sustainable farming practices, but this will require significant investment and policy support.
How can consumers expect to be affected?
Consumers may face higher food prices in the coming years if reduced plantings and lower yields lead to tighter food supplies. The impact is likely to be felt most acutely in regions that rely on imported food, particularly for staple crops like wheat and corn. However, the exact extent of the price increases will depend on a range of factors, including global production levels, trade policies, and weather conditions.
The next major checkpoint for the crisis will be the European Commission’s Agricultural Outlook Conference in June 2026, where policymakers, farmers, and industry representatives will gather to assess the state of the sector and discuss potential solutions. In the meantime, farmers like Ivan Petrov will continue to navigate the challenges of an increasingly uncertain agricultural landscape.
Have you or someone you know been affected by the cost-price squeeze in agriculture? Share your story in the comments below, and don’t forget to share this article to raise awareness about the challenges facing farmers worldwide.