November 24, 2017
A seemingly insignificant debate is going on in the European Union, which will soon reveal its true magnitude if Brussels isn’t careful. A new regulation is being drafted, with a possible dramatic lowering of the cadmium levels admitted in phosphate-based fertilizers. The commission, lobbied by Russia, wants 20 mg per kilo, and Parliament barely voted down a proposition for 80 mg/kg. European agricultural fate now rests in the hands of the Member States Council.
Russia aims to box in the European market, using a resource deemed strategic by the European Union. Agricultural output levels in Europe are among the highest in the world, depend on highly technical fertilizing methods, and rest on a delicate economic and political equilibrium.
Russia has deployed heavy lobbying efforts recently, to persuade Brussels to lower the cadmium residue levels within phosphate to 20 mg per phosphate kilogram. Russia is virtually the only producer in the world to produce phosphate below these levels, due to its volcanic origin. Melissa Shaw, market analyst for Investing news, reports: ”Europe currently imports most of its phosphate from Morocco, where phosphate has high amounts of cadmium residue. However, proposed EU fertilizer requirements that would limit the amount of cadmium residue permitted in phosphate imports could benefit Russia in the future. Romanian center-right MEP Daniel Buda said, “[t]he only country that can produce cadmium respecting these limits is Russia.”
Russia would then shift from a small producer to almost the only one – its current reserves of 1.3 billion metric tons represent 1% of the world’s stockpile, but would then amount to almost 100% of Europe’s available supply. After establishing its almost-monopolistic position on the European gas market, Moscow could also control the entire European fertilizer market if the Council of Member States votes in favor.
In order to push Brussels harder, Moscow has allied itself to « junior miners » from Canada, New Zealand and South Africa. These yet to be developed junior mines possess very small and uncompetitive low cadmium deposits whose potential exploitation pose serious environmental risks. The value of these penny stocks will skyrocket from almost worthless to almost priceless, if the bespoke regulation is installed.
Success in the lobbying effort, then, would hand Russia two large influence levers. It will be able to use its monopolistic position to strongarm Europe on the political stage, as it did by cutting off gas supplies to Ukraine in the winter of 2014. Also, when the new EU regulation kicks in, available supplies will automatically shrink, and prices will rise considerably in response. European farmers, whose competitiveness is already fragile, will be hit hard, while Russian mega-farms will continue receiving subsidized fertilizers. Success in Brussels would therefore pitch the board in favor of Russia both on the fertilizer market and on the agricultural market altogether.
Luckily for Russia, the EU isn’t considering implementing these new rules because the scientific community has raised concern over cadmium levels: it hasn’t. In fact, the last cadmium-suspected illness goes back to one case in the 1950s. Erik Smolders, one of Europe’s main specialists on the matter of cadmium levels in the soil, started publishing on the matter in the early 2000s, initially finding more questions than answers. He recently published again on the matter, finding that only 0.1% of the cadmium within European soil was fertilizer-related, that the levels of cadmium in our soil (32 mg/kg on average) were falling despite fertilizer use and no limits, and that these levels were no cause for concern regarding public health.
Russian efforts to use Brussels as a trojan horse into the EU market therefore relied on the early inconclusive works of Smolders, hushed the more recent and definitive publications, and enticed the European administration to act on the precautionary principle.
The European Food Safety agency was tasked by Brussels to look into risks linked to cadmium levels and concluded to the lack of hazard: “EFSA was asked by the European Commission to assess the risks to human health related to the presence of cadmium in foodstuffs in order to support risk managers in reviewing the maximum permitted levels in food […] The Panel concluded that the risk of adverse effects even for groups that have exposure at levels above the TWI was very low”, even in high concentration areas.
According to Terry Roberts, author of Cadmium and Fertilizers : the Issues and the Science, “The only known case of Cd toxicity (i.e. itai-itai disease) occurred with subsistence farmers in Japan growing rice (in the 1950s, editor’s note) on soils contaminated with industrial wastes […] However, scientific risk assessments have shown that P fertilizer containing Cd is safe and does not pose risk to human health.”.
If Europe’s entire agriculture falls in a state of dependence, despite lack of scientific motive to do so, farmers and fertilizer producers will find themselves in a more dire situation than they already are, hence their opposition to the bill. The Roullier group, which produces fertilizers for European agriculture sees the immediate risk the considered regulation would cast on the entire industry. Pierre Jaouen, director of regulatory affairs, says: “The price increase would result from the drastic reduction of companies able to supply the EU, which would also endanger Europe’s access to that critical material. The vast majority of sources compatible with such limits are located in Russia and owned by fertilizers producers that compete with EU producers.”
Of course, it is unlikely that Brussels would voluntarily place an additional burden onto EU agricultural backs, as it is well aware that the European farming industry is struggling. However, it is likely few European officials have read scientific reports regarding cadmium, and their mollified stance may falter facing the Russian drive.
But the risk is very real. If Russia grabs the entire European fertilizer market, and on top of it manages to destroy European agricultural competitiveness, it may be the straw to break the camel’s back. In the words of British MEP James Nicholson: ““This is not people crying wolf, this is now families in serious danger of losing everything they have”.
The Council of Member States is coming to the bat. The question is, will they expedite the seemingly technical vote, as the Russians hope they will, for lack of insight and interest, or will they see the trap the Russians have set for Europeans to become dependent upon them? If they do vote in favor, the snare will quickly become apparent: not only will massive economic and geopolitical consequences appear, but they will have not changed anything regarding cadmium, as no infrastructure in charge of controlling imports has been designated. Europe will continue importing foods grown with fertilizers at five times the European limit. The precautionary principle at the base of the entire Russian argument is therefore moot, but will the CMB notice?Author : David Hall