Farmers running out of gas

Hot on the heels of the decision by CF Fertilisers to halt production at its ammonia plant in County Durham last week came more devastating news for the farming and food industries – and, inevitably, higher food prices.

Yara, the world’s biggest fertiliser producer, has decided to cut its output of ammonia-based urea and nitrogen fertiliser in Europe by around half.

The Norwegian chemical group exports to more than 60 countries around the world and is one of Europe’s main suppliers. But even such a giant producer has been hit by what the firm calls ‘record-high prices’.

Other ammonia producers in Poland, Italy and Germany have also reduced output, which will create yet more challenging conditions for farmers as well as food and drink manufacturers.

As we are learning to our cost in this crisis, there are so many unintended consequences of Russia’s war on Ukraine. Cutting back on fertiliser also means shortages of carbon dioxide. Co2 is a by-product of making ammonia nitrate fertiliser and cannot be stored for long. It is essential for processes such as putting the fizz in drinks. It is also used for surgical procedures in hospitals.

Brewers are suffering, and only those with their own plants are likely to keep producing. With pubs already facing an existential crisis this winter because of soaring energy bills, they may face running out of beer too.

Ministers are dithering over whether to bail out CF Fertilisers, which has been rescued once already. Some farmers and manufacturers have been able to find alternatives – or adapt their processes – but they fear running out of future supplies over the coming weeks.

Minette Batters, president of the National Farmers’ Union, tells me that it is vital the Government intervenes to help with Co2 supplies to avoid further crises in the industry, which is already suffering sky-high fertiliser prices. More pertinently, Batters says it is time that food security is turned into a statutory obligation by the Government.

Batters is right. Food security must be at the heart of any government’s domestic policy. She will have the chance to put Liz truss on the spot this thursday when she hosts a hustings with the tory leadership hopeful. As Batters puts it, food security is at a tipping point. And there are no signs that wholesale gas prices are going anywhere but up.

HBOS travesty

WHEN will the Financial Conduct Authority and the Bank of England’s Prudential Regulation Authority learn some basic lessons of life? Sneaking out what they knew would be a controversial judgment on a Friday afternoon to avoid the headlines ahead of a Bank holiday, does not make something go away.

The fact that the two watchdogs are not taking any action against senior HBOS directors, who ran the bank into the ground, is a travesty.

An even greater travesty is that the Bank of England’s seven-year-long investigation fails to say whether it concludes that there was any wrongdoing.

Yet the top bankers – Lord Stevenson, James Crosby and Andy hornby – pursued a strategy of such reckless lending that the bank would have gone bust with debts of £45bn even if there had not been a global crisis.

The manner in which the fatal rights issue at HBOS in the summer of 2008 was conducted has still not been adequately explained.

This is not going to go away. the toothless regulators should be on red alert.

Truss has the financial watchdogs in her sights for reform.