Letter from Brussels - July 2026

The EU Commission has announced a €540m package to support farmers struggling with rising fertiliser costs. It follows the fertiliser action plan unveiled in May. The good news is the relatively speedy recognition by the Commission that this is a deeply concerning situation. The bad news is that it does not seem to go far enough. The package comes with some tweaking to State aid rules which will give leeway to the Minister for Agriculture, Food and the Marine to bolt on a 200 per cent national top up. When the sums are done, it would shake out at around €48m in total for Ireland.
The geopolitical disruption in the middle east has compounded existing fears for medium- to long-term fertiliser prices which already existed because of the Commission’s carbon border adjustment mechanism (CBAM), which came into force in January and which is being heavily fought against by the farming and co-op lobby here in Brussels. That remains the main battle and while noble in intention to resist carbon leakage from non-EU imports, it is to all intents and purposes a tax on food production.
Once food price is mentioned, politicians take notice, hence the pressure on the Commission to intervene. But the lines between rising food prices and protecting the environment are somewhat blurred in this instance. I took a call from a journalist some weeks ago asking about the fertiliser price crises following comments from the president and chief executive officer of Yara, Svein Tore Holsether who said ‘the interruption to supplies of fertiliser and its key ingredients due to the war in Iran could cost up to 10 billion meals a week, globally’. Once I explained that it’s the next sewing season that is uncertain, the reporter lost interest. It is only when the problem is here that people sit up and take notice; that’s why the lobbyists in Brussels are proposing sensible solutions right now to stave off a crisis later this year and into 2027. Postponing CBAM in these times of geopolitical uncertainty makes sense but the Commission remains not for turning. There is a safeguard mechanism built in, intended to address exceptional disruptions in fertiliser markets in times of crises but the trigger threshold is simply too high, say experts, who estimate that CBAM will impose an additional €820m cost on European farmers during 2026, with the burden increasing progressively as the levy is phased in towards full implementation in 2034.
At time of writing, there is an easing of tensions in the Strait of Hormuz, but we live in fickle times with global food security most vulnerable. And time will tell if this latest Commission package will be enough to tackle the predictions from Mr Holsether.