Fertilizer Market Context

Overview
In today’s world, the application of fertilizers by farmers to improve the quantity and quality of
their crops has become a requisite practice rather than an optional one. The intensity of land use,
the demands for higher quality products and the rapidly increasing number of mouths to feed will
only allow a select few, who are blessed with farm lands receiving natural fertilization or whose
output is very small, to practice agriculture without the application of modern specialty fertilizer
products.

This requisite need to complement their lands’ naturally available minerals has increasingly
driven farmers to seek individually tailored fertilizers products that are capable of being
delivered to the crops in an optimum manner. Up until the late 1990’s, readily soluble fertilizers,
comprising the desired elemental mix, tended to be applied to the land by spraying, mechanical
granule dispersion or pneumatic granule injection into the soil together with the crop seeds or
seedlings.

While this practice in the main worked well, rain events after fertilization always had the
potential to wash a high proportion of the nutrients away before they could be taken up in the
crops. Unfortunately these nutrients would too often find their way into local streams and rivers,
promoting undesirable water plant growth and algae booms, with the result that waterways
would often become choked with plant growth and toxins from the algae blooms would
periodically kill marine life.

Over the last decade, these problems have increasingly been addressed by a switch to
bioleachable slow release fertilizers, delivered to the crops in a very targetted manner, as these
are not subject to rapid loss into the water table and local waterways. Importantly, the swing to
slow release micro nutrient fertilizers (MNF) allows the farmer far more precise control over the
fertilization process and delivers nutrients at a more constant rate to the crops over their growth
cycle, factors which combine to reduce the cost of this high cost input to modern agriculture.

MNF Price History

The specification of an MNF product, co-produced with an electrolytic manganese product, will
be dependent on a number of factors which include:

 the elemental make up of the feedstock manganese ore;

 the configuration of the leach processes employed to generate the electrolyte;
 the configuration of the processes employed to purify the electrolyte; and
  any additions to the tailings stream from electrolyte purification that are made to bring
the MNF product up to the buyers preferred specification.

As such, there is no specific product price inflormation that can be relied upon as a guide to past
pricing trends. However, with the increasing preference seen for bioleachable MNF products,
and the overall expansion in demand for fertilizers generally, all fertilizers prices have risen
dramatically in recent years as is shown in the following chart and this trend can be reasonably
assumed to be a proxy for typical MNF products:

This chart, which was originally published by International Fertilizer Industry Association and
subsequent amended by Mongabay shows the dramatic increases that have occurred over the last
year for three oil industry derived fertilizers products over and above the solid 50-100% price
increases the products experienced over the three prior years. Obviously the price jumps of late
are in part related to the price of oil and in part related to specific shortages that may not be long
term in nature. However, to some significant degree at least, they are also the result of rising
demand for all fertilizer products.

Whilst the short term factors driving the price upward will inevitably reverse, prices are unlikely
to return to the levels seen in the 1990’s and the earlier half of this decade due to a combination
of more persistent longer term factors including:

 Continued escalation in demand for food crops;

 Continued escalation in demand for energy crops; and
 Higher costs of production of MNF type products driven particularly by the need to
utilize lower and lower grade feedstocks in their production.
These higher prices translate into higher priced crop production, and are therefore a real concern
for farmers and governments alike. Short of finding huge new deposits of high grade, low cost of
production minerals from which to make fertilizers, approaches such as those promoted by Hitec,
where ‘wastes’ from other industries can be utilized to produce first quality fertilizer products,
can provide an effective means of constraining future raises in fertilizer prices.

For those readers seeking a more in-depth appreciation of the variety of fertilizer products traded
today and the individual demand and supply factors that are driving their pricing there are any
number of website that can be of assistance. The following few will assist to begin to gather such
an understanding:

 International Fertilizer Industry Association

 International Fertiliser Society
 Fertilizer Institute
 The Australian Agricultural Directory

GMS Price History

With the notable deficiency of manganese as an element in the agricultural soils of many
countries, and the overall expansion in demand for fertilizers generally, prices for granulated
manganese sulfate (GMS) have risen dramatically in recent years as is shown in the following
chart:

While these will always be a demand for a manganese fertilizer in this format, it is less clear how
strong that demand will be over the longer term. Certainly, even on the basis of the most
pessimistic projections demand would appear likely to remain reasonably strong over the next
decade. It is in this context that HiTec is seeking to advance a 25,000tpa GMS project based
upon the fines ore make from its manganese lump ore mining project in the Pilbara district of
Western Australia.

Once commissioned, this plant could contiue to run independently as a GMS fertilizer plant,
could be integrated into a larger manganese electolytic plant complex with GMS produced as a
co-product, or could be adapted as the first step in a manganese electrolytics plant process, with
GMS ceasing to be produced. The approach to be taken would be determined by the market
context for each of the products at the time and the financial HiTec’s capital raising ability.

‘Green’ Production Credentials

A producer of electrolytic manganese dioxide (EMD) or electrolytic manganese metal (EMM)
employing HiTec’s patented processes, has the opportunity to produce both MNF and GMS as
part of its production process, thus maximizing the use of the ores mined and minimizing the
extent of production wastes that require costly long term impoundment to prevent metal ion
pollution of the surrounding environment. The type of fertilizer that can be produced by an EMD
or EMM producer as a co-product will depend on the minerals contained in the local ore, the
process configurations selected (which are variable) and the electrolytic product being produced
(ie EMD for alkaline batteries, EMD for lithium-ion batteries or EMM). The important thing is,
what was a cost of production and a waste of resources and an environmental liability, can
become a valuable second revenue stream, a utilized resources and a product that can enhance
food production whilst helping to protect the environment.

It is the HiTec sulfur dioxide leach process that opens up this possibility by presenting the tailing
from the electrolytic process in a form suitable for MNF production. Producers of manganese
electrolytic products who use conventional processes for treating manganese oxide or manganese
carbonate ores do not have this opportunity, although in many cases they could adopt the
technology relatively cheaply and very profitably.

Click here to return to the Prospects page.

World fertilizer prices drop

dramatically after soaring to all-
time highs
December 16, 2008
Enlarge

World fertilizer prices doubled in 2007 and reached all-time highs in April 2008. But prices
began dropping dramatically in October and November. Graph by IFDC from information
obtained from Green Markets and FMB Weekly

World fertilizer prices began dropping dramatically in late 2008 after reaching all-time
highs around April.

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The price of urea, the world's most common nitrogen fertilizer, rose from about $280 to $405 per
ton in 2007 and reached $452 in April 2008. The price then soared to $815 per ton in August—
but plunged to $247, lower than before the price spiral began, in mid-December.

The price of diammonium phosphate (DAP) increased by five times—from $262 to $1,218 per
ton—from January 2007 to April 2008, but had fallen to $469 per ton in mid-December.

Potash is the only fertilizer whose price is still rising. Standard grade muriate of potash, the most
common source of potassium, sold for $172 per ton in January 2007 and $875 per ton in mid-
December.

Why Fertilizer Prices Spiked: A "Perfect Storm"

"Numerous factors converged simultaneously to cause fertilizer prices to soar, then suddenly
collapse. Some have compared the series of events to 'a perfect storm.'"

Prices were essentially driven up by an imbalance between supply and rapidly expanding
demand, especially in Asia, Gregory explains. Fertilizer demand reached a level that supply
could not match. Demand was particularly strong in China and India. Another factor was
increased demand for fertilizers to produce biofuels in the United States, Brazil, and Europe.
Increased livestock production created still more demand for grain and thus for fertilizers. Grain
reserves became historically low and prices rose sharply.

Further worsening the situation were China's imposition of high tariffs on fertilizer exports and
the devaluation of the U.S. dollar in 2007 and 2008. Energy prices peaked, causing an increase in
the price of natural gas—essential for nitrogen fertilizer production. Phosphate prices were also
driven up by a huge increase in demand and prices for sulfur, vital for production of the popular
DAP and other high-analysis phosphate fertilizers. The supply of quality phosphate rock also
became tight.
Why Prices Then Plunged Rapidly

"But potash prices have stayed high due to its shortage and difficulties in transporting Russian
potash because of an enormous and expanding sinkhole near the Silvinit mines," Gregory says.
"Demand for potash increased from 2006 through 2008, and potash inventories are now 37%
lower than over the past 5 years."

Price movements will probably be volatile for at least the next 2 years, until new production
facilities open and the current lower prices for nitrogen and phosphate recover, Gregory says.

Source: IFDC

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Fertilizer: Uneven Recovery
Most retailers will find that coming back from the
unprecedented price swings of 2008 will be a slow road
indeed.

By Andrea Klosterman Harris

Contributing Editor
September 2009

Many in agriculture, from the relative newcomer to the jaded “seen it all” expert, describe the
2008 year in fertilizer using some pretty heady terms:
“Incredible.”
“Unprecedented.”
“Game-changing.”

Thanks to the violent fertilizer price crash last fall that followed on the heels of a massive price
run-up through the spring and summer, many retailers bought high on expected shortages —
only to be left holding the bag when customers did not follow through on purchases.

• Chart: Major Producing Countries Of Fertilizers/Raw Materials

Retailers who did not dial into high-priced product made out well, but the clear majority spent
the most recent pre-season dealing with angry growers refusing to pay fertilizer prices
significantly higher than they were seeing for wholesale product on the Internet.

With the growing season winding down and fall fertilizer time closing in, retailers are taking
stock of current market conditions from the supplier to the grower and making plans for the
months ahead. By most accounts, any rebound in fertilizer will be measured in steps and not
leaps.

• Dow AgroSciences Nitrogen Stabilizer Receives Registration

Both Sides Of The Market

“Fall sales may improve a little over last year, but not much,” says Richard Warner, President,
Warner Fertilizer Co. in Somerset, KY. Warner’s view is actually more optimistic than many
dealers, who don’t believe that sales will increase this season at all.

However, some retailers have already seen improvements this season. Kathy Sims, President,
Sims Fertilizer & Chemical, Osborne, KS, says: “We saw tremendous growth in the fertilizer
segment of our business this year. Our sales were up by more than 100%.” The secret to Sims’
success? “We were very fortunate that we did not stock fertilizer last fall, and that put us in a
very competitive position.”

Other retailers were not so lucky, but are still hopeful. Larry Beck, President, Mid-Valley
Agricultural Services Inc., Linden, CA, says: “Fertilizer sales were down in 2008 because of the
price of potash. Recently the price of potash has dropped, but it needs to come down another
20% to attract increased usage on the West Coast. The price of nitrogen and phosphorus will
result in normal usage in 2010.” The high price of potash may impede its sales again this year
and next, but growers will be putting on more phosphates and nitrogen.

Potash prices are still a problem for growers and retailers alike. “I feel that the price of potash
needs to be adjusted downward even more,” says Verne Johnson, President, Jay-Mar, Inc. of
Plover, WI. “Though it has come down in price, it’s still way too high relative to the price of
nitrogen and phosphate.”

“Fall sales could be better as grain prices improve,” Warner says. “Crop input costs such as
fertilizer, particularly potash, still need to decrease to overcome the bad taste that farmers had as
a result of the two prior years’ high prices.”

Grain prices are also having a strong negative effect on fertilizer purchases. Wheat futures fell in
early August, bringing down fertilizer demand. Brent W. Sutton, General Manager, Growers
Fertilizer of Lake Alfred, FL, says: “Commodity prices need to improve for our customers.
Lower cost fertilizer materials may help sales also.”

Whether or not commodity prices go back up, however, growers may not be able to skip adding
fertilizer two years in a row. With lower grain prices, growers can’t afford to lose quality or yield
as well. Dan Mogged, Vice President of Van Horn Inc., Cerro Gordo, IL, says: “Even with the
commodity prices being down, [growers] know they need to replace fertilizer.” Van Horn Inc.
has been taking respectable orders for fall: “It looks like they’re significantly increasing because
they cut back last year,” Mogged says. “In a lot of cases, they’re putting on what they didn’t put
on last year to make up for that.”

Johnson says Jay-Mar “would love to have better fall fertilizer sales, but low grain prices and
even lower milk prices are making fall fertilizer application hard to afford. Another factor
affecting the fall season is the price of potash,” he adds. “As of late July, the price of potash is
way out-of-synch with the rest of the fertilizer market. Unless the prices paid to the farmer
increase and/or the price of potash decreases, it will still be a disappointing fall season.”

We Shall Overcome

As for last year’s inventories, early returns from the 2009 CropLife 100 Survey indicate that the
high-priced inventory has been dealt with and many retailers are ready for 2010.

“We just wrote down what we had and moved forward,” explains Mogged. “Looking back at last
year as we were coming into it, the quicker you decided to take a hit on some stuff, the better you
worked through it. Because if you decided to do it earlier, you got a better price for it than if you
waited until later to just write it down.”

How can dealers avoid getting stuck with massive inventories again this year? “That’s the
$64,000 question,” says Johnson. “If I knew the answer, I’d be a very rich man. We got stuck
with expensive inventory this year because we and many other dealers relied on our trusted
suppliers who told us that ‘You need to buy now or you won’t get your product.’ Then prices
plummeted, leaving dealers stuck with bins and tanks full of high-priced inventory.” Jay-Mar
isn’t running a specific promotion to unload inventories this fall; however, says Johnson: “Our
goal is to have our bins and tanks as empty as possible, and our sales force will work to achieve
this goal. We regularly solicit pre-pay business during the winter months … [and] anticipate that
the potato growers in our area will be eager to pre-pay again this year.”

Adaptability can be key, says Sims: “After 30 years in the fertilizer and chemical business, we
have never seen a year like this one. But one thing that is constant in this business is that every
year is different and you have to adjust if you are going to survive.” Although Sims Fertilizer &
Chemical managed to avoid last year’s massive fertilizer stockpiles, Sims says, “We did have
some high priced inventories in chemicals, but because we sell high volumes we were able to
buy some cheaper inventory and cost average what we sold.” Retailers still stuck with large
fertilizer inventories may be able to benefit from such a strategy.

Both those who were burned by the high-priced inventories last year and those who managed to
avoid it have advice to offer: “Watch product costs closely, follow grain and cattle prices, and
listen to customers’ concerns and plans,” advises Warner.

“Buy and commit to the least amount possible,” recommends Sutton.

And finally, don’t forget about location: “We are fortunate to be within 10 miles of the port of
Stockton, so we don’t require much storage,” says Beck.

As for 2010? The key is to not repeat last year’s problems with overstocked, high-priced
inventory — and to remain optimistic. As Sims puts it: “We remain positive about next year’s
sales and look forward to the new challenges.”

Fertilizer prices and availability for 2009

By Dr. Gary W. Hergert

Soils and Nutrient Management Specialist, UNL Panhandle Research and Extension Center

The past two years have seen major changes in crop production costs, especially fertilizer. What
happened? Why did this happen? What's projected for 2009? Will fertilizer be available?

Fertilizer is truly an international commodity, so what happens in the Middle East, India, China
and in former Soviet Union Republics like the Ukraine (Yuzhny) influences your local prices.
By September 2008, nitrogen prices had tripled compared to two years earlier. But since last fall,
prices have dropped just like the stock market. World demand for fertilizer had risen 14 percent
in the past few years (primarily from South America, China and India), which drove up prices.
U.S. ethanol mandates increased demand for N because of increased corn acreage, as corn uses
45 percent of all N fertilizer. When the financial crisis spread around the world in September
2008, it also affected demand for fertilizer, causing significant price drops in world prices.

In the United States, ammonia for fertilizer accounts for about 89 percent of total uses, with the
remainder primarily for industrial uses. Historically the price of ammonia is strongly correlated
with natural gas prices, because 85 to 90 percent of the production cost of ammonia is natural
gas. Natural gas prices have been at low levels since last summer due to adequate supply and
decreased demand.

Industrial ammonia is used to produce nylons, fibers and plastics, polyurethanes, hydrazine and
explosives. Industrial ammonia use is reflecting steep declines because of decreased use tied to
the U.S. housing and construction slump, and also decreased use by automobile, pulp and paper
industries. Demand for ethanol has declined with the drastically decreased crude oil and gas
prices. Late harvest, high prices and wet soils limited N application in the corn belt this fall to
about 50 percent of normal. Less corn is also being used in the livestock industry, as consumer
demand for meat products has lagged during the recession. All of these factors have led to excess
ammonia supply (industrial and fertilizer) in the United States and the world, and are reflected in
world prices.

So, why haven't you seen a decline in prices at your local supplier? The problem is that dealers
have high-priced inventory in bins and tanks that they are waiting to sell. Many bought before
peak prices last summer, but now will have to see if they can "cost average" to help bring down
cost, knowing there is cheaper product on the market. Dealers cannot sell those products below
their cost or they will not be in business, even though current prices on the world market are
much lower. Fertilizer prices have decreased since December. Barge traffic up the Mississippi is
closed for winter, storage is full, and there are tanker ships sitting off Tampa full of ammonia
that is being offered less than $200 per ton, but there are few buyers and no place to move it.

Just as nitrogen prices have varied widely, phosphate prices quadrupled since two years ago
before dropping again. China and India had bid up the market to $1,200 per ton for 18-46-0
(DAP) this summer. Other major world companies (Yara, Agrium, Koch, Terra, Mosaic) have
curtailed production in Europe, Canada, the Caribbean and the United States, but there is too
much excess supply for production cuts to affect prices in the short term.

There is cheaper fertilizer on the market, but dealers will not be purchasing until they have sold
what is currently in bins and tanks. If there is an upsurge in demand for spring that comes late
(late February, early March), there may be difficulty in getting product in time. Farmers improve
their chances of being assured that there will be product available if they can spread out their
timing window for fertilizer (some preplant N, some sidedress, some through an irrigation
system) for summer crops. Most phosphorus goes on preplant or at planting, so producers should
look at securing it now. Wheat producers who apply ammonia can probably wait until early
summer and may be able to purchase lower priced ammonia and phosphate.
As producers plan for 2009, fertilizer prices will be fluctuating and may be higher than in 2008,
although there may be some bargains later this spring. Producers cannot control fertilizer prices
(other than being aware of world trends and locking in a good deal when they find one), and they
do not control commodity prices. What they can control is their production inputs and costs by
improved management. A website addressing production costs is at http://cropwatch.unl.edu.

The keys to maintaining profitability are to know your soil test levels and do the best job of
fertilizer application to enhance efficiency. A new website to develop fertilizer recommendations
based on UNL criteria can be found at http://soiltest.unl.edu.

Issues & Analysis Issues Index

Fertilizers and Environmental Pollution    

By Mohammad Ali Khaskheli
Agriculture Officer Sanghar
Fertilizers are organic or inorganic substances, either natural or synthetic, used to supply elements (such
as nitrogen, phosphate and potash) essential for plant growth. They are the most effective means of
increasing crop production and of improving the quality of food and fodder. With them, food for more
people can be produced than this planet would otherwise support.

Fertilizer use is most effective (for obtaining high

crop yields) on soils with high natural or improved
fertility, but even on low fertility soils crop growth
can be substantially improved.

Fertilizers are needed for all types of long-term crop

production in order to achieve yield levels which
make the effort of cropping worthwhile. Modern
fertilizer practices, first introduced more than a
century ago and based on the chemical concept of
plant nutrition, have contributed very widely to the
immense increase in agricultural production and
have resulted in better quality food and fodder. As a
beneficial side-effect, the fertility of soils has been
improved resulting in more stable yield levels, as well as in a better (nutrition-induced) resistance to some
diseases and climatic stress. Furthermore, the farmer's economic returns have increased due to more
effective production.

Over-application is a common problem in Asian countries. Farmers want to ensure good yields, and apply
so much fertilizer that much of it is wasted. The problem is particularly acute with cash and other
horticultural crops, which are high-value and produced very intensively in most of Asia. In tropical and
sub-tropical climates, provided there is enough soil moisture, vegetable fields may bear as many as ten
successive crops a year, all of which may receive heavy applications of fertilizer. In Pakistan fertilizer
consumption has increased threefold during the past 30 years. It reached one million nutrient tonnes in
1980/81, two million tonnes in 1992/93 and three million tonnes in 2002/03. Nitrogen accounts for 78
percent of the total nutrients, phosphate for 21 percent and potash for less than one percent. Like many
other developing countries, Pakistan does not apply high rate of fertilizer, and therefore the danger of
environmental pollution is not yet high. However, with a development rate as that at present, Pakistan will
soon become the country using high fertilizer application rate per area unit in the world.

Chemical fertilizer in the form of salts, when added to soils gets converted into ionic forms after dissolving
in the soil solution. They are relatively safer than pesticides which exhibit toxic properties on living
systems. However, all the quantities of fertilizers applied to the soil are not fully utilized by plants. About
50 per cent of fertilizers applied to crops are left behind as residues. Though, inorganic fertilizers are not
directly toxic to man and other life forms, they have been found to upset the existing ecological balance.
The nutrients escape from the fields and are found in excessive quantities in under ground water, rivers,
lakes and coastal waters.

Fertilizers can become a source of pollution when they are used in excess. Among the three macro (N-P-
K) fertilizers being used at present, only potassium fertilizer is not yet considered a source of
environmental pollution. The other substances like nitrogen (urea or calcium ammonium nitrate) and
phosphorus (DAP or MAP) fertilizers, if used unreasonably, can cause environmental pollution and mainly
through accumulation of nitrate in agricultural products, drinking water, eutrophication of water sources
and accumulation of cadmium.

Much of the concern about nitrogen in the environment is due to the potential movement of unused or
excess nitrate-N through the soil profile into groundwater (leaching). Because of its negative charge,
nitrate-nitrogen is not attracted to the various soil fractions. Rather, it is free to leach as water moves
through the soil profile. Soil type has an influence on the amount and speed with which nitrate nitrogen
moves through a soil profile with movement greater on sandy as compared to clay soils. In this concern
the nitrogenous fertilizers cause more harm then other fertilizers.

Nitrogenous fertilizers like urea under go extra cellular enzymatic decomposition to form ammonium
compounds, which are either absorbed by the plant roots or converted to nitrates, which are absorbed or
lost in leaching or converted to gases in the nitrogen cycle. The high nitrate rates can increase the nitrate
content of drinking water, vegetables, fruit juices... and it is the direct cause of blue baby disease. The
reason is that when digested, nitrates (NO3) may be reduced to nitrites (NO2) changing
Oxyhaemoglobine (oxygen-carrying substance in blood) to Methaemoblobine, a non-active substance,
which at high rates will influence activities of endocrine and form tumours. Nitrite when entered in to
human body may react with amine to form Nitrosoamine, a cancer-forming substance. Pregnant women
should also avoid drinking water high in nitrate. Recent studies suggest connections between high-nitrate
water and birth defects or miscarriages.

At present many people misunderstand that only chemical nitrogen fertilizers are sources of nitrate
pollution. In fact, nitrate can be formed from soil organic matter, farmyard manure, and agricultural by-
products. Similarly the underground water may be the source of nitrate (such as in Runnels Texas State
(USA) 3000 mg NO3/litre; where as the WHO's standard is 50 mg NO3/litre) where excess chemical
fertilizers are not used. The main reason is due to decomposition of organic matter after incorporation of
crop residues. Researches with N15 conducted by PPI (1996) have also found that most of leached NO3
were not originated directly from applied nitrogen fertilizer, but from organic matter. Research results
conducted at Rothamsted Station (United Kingdom) have come to the similar conclusion: The leached
NO3 source came mostly from organic matter and crop residues. Nitrogen coming from these sources in
decomposing cycle is easily leached and longer accumulated compared with that coming from mineral
fertilizer. Thus, the application of organic fertilizers, crop residues or agricultural by-products, crop
increase in condition of high temperature, high rainfall will be a big source supplying NO3.

Soils of Pakistan are poor in organic matter (below one per cent) and the use of organic fertilizers is not
common, moreover the rates of chemical fertilizer use have not increased the recommended levels.
Therefore, under such conditions the nitrate pollution in drinking water can not be expected. However,
safety measures and appropriate management practices must be adopted at farm level, because water
once polluted with nitrate can not be reclaimed.

Another hazard associated with excessive use of nitrogenous fertilizers is the gaseous loss of nitrogen,
into the atmosphere. High doses of carbon dioxide and ammonia that escape into the atmosphere both
from fertilizer manufacturing plants and soils affect human health. Further the oxides of nitrogen have
been reported to adversely affect the ozone layer, which protects the earth from UV radiation and heating
up of earth. The oxides of nitrogen cause respiratory diseases like asthma, lung cancer and bronchitis.
Arsenic, ammonia are waste stream components of nitrogen manufacturing plants while fluoride,
cadmium, chromium, copper, lead and manganese are waste stream components of phosphatic fertilizer
industry. If these waste streams of components are not properly disposed they cause harm to human
beings and animals with contamination of air and water.

Phosphorus has been associated with environmental pollution through the eutrophication of lakes, bays
and non-flowing water bodies. The symptoms are algal blooms, heavy growths of aquatic plants and
deoxygenation. The eutrophication of water sources accelerates growth of algae causing competition for
oxygen with fish and other useful aquatic organisms. Eutrophication of water bodies due to higher nitrate
and phosphate concentrations, increasing levels of nitrates in drinking water sources, accumulation of
heavy metals such as lead and cadmium in soils and water resources are the principal causes of
environmental concerns due to irrational fertilizer use in agriculture. There is no serious problem of
eutrophication in Pakistan at this stage, except some localized problem due to mismanagement.

Cadmium accumulation in agricultural products is also an important problem of pollution. This element is
contained in phosphorus fertilizers. At Rothamsted Experimental Station (United Kingdom), with high
rates of phosphorus fertilizer being applied for hundreds of years, inconsiderable accumulation of
cadmium in agricultural products has been found.

Phosphate fertilizers may contain cadmium when sedimentary rock phosphate is used as raw material.
Cadmium is also added to the soil by aerial deposition. Soil chemistry also influences cadmium mobility
and uptake by plants. As with other metals, low pH increases mobility. Absorption/desorption of cadmium
is about 10-fold more rapid than for lead. Chronic cadmium exposures result in kidney damage, bone
deformities, and cardiovascular problems. A major human poisoning occurred in Japan during World War
II due to industrial contamination of rice paddies. Since phosphate fertilizers can contain significant
cadmium concentrations, cadmium can accumulate in crops, and human health problems can result from
crop cadmium contamination.

The use of phosphatic fertilizers in our country is still so low (i.e. 12-13 kg P2O5/acre approx.), that the
current fertilizer usage presents no immediate hazard. However, cadmium should be removed when raw
materials are processed, wherever possible and research should be undertaken to assess cadmium
build-up with continuous use of phosphatic fertilizers.

Suggestions
A soil test should be performed before the purchase or application of any "special purpose" fertilizers. It is
not possible to make a blanket statement that one fertilizer is best for all crops every where. It is true that
different crops use different nutrients at different rates. The unknown is the reserve of nutrients already in
your soil. This changes with every soil type, location and previous fertilizer history of the soil and crop.

Lack of knowledge is widespread and is usually due to poor coordination between those working in
research and those in the field working as extension officers. Local research work is required into soil and
crop conditions, balanced fertilization, whether macro and micro-nutrients are required, the use of animal
manure and compost, the use of improved seed, better cultivation and harvesting techniques, and the
economics of fertilizer use. Extension workers must make use of demonstrations, preferably on farmers’
fields and keep up a constant flow of information by farm visits and by the use of radio and television. The
availability of proper fertilizers, according to soil type and crop demand should be assured at right time.
 

Agro-chemicals have been measured in all environmental compartments of the Mekong Delta
(i.e., soils and sediments in addition to receiving waters). Of particular concern are monitoring
results which show the presence of banned or restricted chemicals such as DDT, lindane, captan,
monocrotophos, methyl parathion, azodrin, and methamidophos.

Effect Of Agro-Chemicals in the Environment

Rice production in Vietnam’s Mekong Delta contributes significantly to national economic
prosperity in terms of food procurement and security for the nation, and provides revenues
through export of the rice surplus. However, it is important not to isolate economic benefits
from potential environmental concerns relating to the rapid intensification of rice cultivation in
Vietnam. Intensification of agriculture, enabled by increasing usage of agro-chemicals in the
Delta, has a price in terms of adverse impacts such as human health problems and environmental
damage. These adverse effects of agro-chemical use are briefly examined in the following
sections.

Environmental Issues Relating to Fertilizer Use

Potential environmental effects of fertilizer use in agriculture, particularly if large quantities are
applied or if they are applied incorrectly, include:
 Nitrogen (N) and phosphorus (P) in run-off can contribute to eutrophication in receiving
waters with a risk of oxygen depletion and fish kills
 Ammonia (NH3) gas can cause haze and contribute to the acidification of soils
 Nitrogen oxide (NOX) can contribute to regional acid precipitation and locally reduced air
quality
 Sulphur dioxide (SO2) reacts with other gases and contributes to haze formation and also to
regional acid precipitation
 Dust can be a local nuisance and contribute to visible haze
 Fluoride (F), in high concentrations, is dangerous to plants and animals

Although the above-listed effects are normally imperceptible, cumulatively they can lead to
serious degradation of receiving water bodies, the soil, and the environment in general unless
preventative measures are taken. In developed countries, the levels of fertilizer application are
based on regular soil analyses in order to prevent high concentrations of fertilizers in soil and
consequent negative effects to the environment. This is not generally done in developing
countries like Vietnam where farmers often apply excessive quantities of fertilizer in the
mistaken belief that more fertilizer will result in higher crop yields and increased profits.

Human Health Effects of Agro-Chemicals

In addition to concerns regarding the quantity of agro-chemicals utilized in Vietnam’s Mekong
Delta, their improper use and handling is common. A field survey undertaken at representative
sites in the Delta indicated that farmers commonly mishandled pesticides and improperly applied
hazardous pesticides in combination with other chemicals. Of particular concern are the
symptoms of poisoning observed among farmers due to the use and unsafe handling of hazardous
chemicals. Unfortunately, it is difficult to quantify this problem since most farmers experiencing
poisoning symptoms do not go to the hospital and most local health officials are not able to
properly diagnose pesticide poisoning. However, it is estimated that significant health costs are
incurred, such as cost of medical treatment and opportunity cost of farmers’ time, as a direct
result of improper pesticide use by farmers.

More subtle than direct impacts of improper chemical handling by farmers are the indirect
human health effects of excessive dietary updake of chemicals. Indirect impacts of chemical use
can be illustated by looking at nitrogen. With the trend of intensive farming to get high yield for
crops, more and more nitrogen fertilizer is being used in the Mekong Delta. When there is
surplus nitrogen in the soil it is converted to ammonia of nitrate through biochemical processes
and accumulates in soil and water. Nitrate can then be absorbed into vegetables and cereals in
excess of the recommended concentrations for food (i.e., the daily maximum for nitrate in food
and drinking water is 300 mg/day for adults and only 30mg/day for children). Examples of
excessive food concentrations of nitrate can be found in many countries which practice intensive
agriculture. Holland is a typical example. Vegetables produced in this country, especially in
winter, can contain up to 4,000 mg nitrate/kg. It has been estimated that the average daily uptake
of nitrate by adults is 1,100 mg nitrate through food and 100 mg nitrate through drinks. This
uptake exceeding the standard level for adults by four times and the children’s standard by a
greater margin. High nitrate concentrations in drinking water have been shown to lead to nitrate
disintegration to nitrite (NO2) and the creation of nitroamin in the digestive system which causes
suffocation, anermia and cancer.

Although the use of nitrogen fertilizer has increased remarkably due to intensification of
agriculture in Vietnam, and in the Mekong Delta in particular, very little research has been
undertaken on the effects of over-use of nitrogen fertilizer to the environment and to farmer
health. In addition, some limitations remain in Vietnam’s capacity to monitor nitrate
concentrations in soil, food, water, especially drinking water as part of environmental monitoring
programs.

Effect of Pesticides in the Environment

Run-off of pesticides to receiving water bodies has the potential to significantly impact aquatic
organisms by inhibiting growth and causing reproductive failure. Uptake by humans through
consumption of larger fish with elevated tissue pesticide concentrations is a human health
concern. Pesticides can also leach into groundwater causing additional human health concerns as
a result of drinking from contaminated wells.
In contrast to fertilizers, extensive research has been completed in Southeast Asia relating to
pesticide use in rice agriculture. A 1989 survey of elven rice growing countries estimated
average yield losses due to insect pests at 18.5%. Researchers are divided on how best to
address the problem of crop loss to insects. Much research focuses on optimizing insecticide use
in relation to increasing rice yields. Experimental results are variable with some results showing
that insecticide-protected plots yielded almost twice as much as unprotected plots while other
showed no significant differences in yield between the treated and untreated plots. Other
research has looked at the effectiveness of natural controls on insect pests. On balance, although
rice yields are higher when chemical pesticides are used, natural controls were found to be
adequate under normal growing conditions. The question of how best to proceed becomes more
complicated when the human health costs of pesticide use are factored in. Studies indicate that
the positive production benefits of applying insecticides are overwhelmed by the increased health
costs (i.e., the value of crop loss to pests is invariably lower than the cost of pesticide-related
illness and the associated loss in farmer productivity).

Rice farmers are poisoned from pesticide use through direct exposure to pesticides during
handling and application and from uptake of pesticide residues in their food (e.g., vegetables,
root crops, frogs, fish). Farmers and agricultural workers face chronic healths effects due to
prolonged exposure to pesticides with eye, dermal, pulmonary, neurologicical and kidney
problems being associated with long-term exposure. Serious health effects are positively
correlated with intensive pesticide use compared to less intensive pesticide use.