PHOSPHORUS ECONOMICS – A REVIEW

Abstract

Adding mineral Phosphorus fertilizers to fields has fueled the Green revolution since the early 1960ies. The formerly limited yields could be enhanced by factor 3 or more using the same area but fertilizing the arable land. Ecologists observed that P accumulates in soils and in surface and coastal waters causing environmental disturbances such as eutrophication and oxygen depletion e.g. in the Baltic Sea and the Chesapeake Bay already in the late 1980ies. Environmental and ecological economists saw in these developments a new example for external effects causing social costs that should be avoided. Scientists from various disciplines dealt with the effects to the environment and how these impacts can be mitigated. Whereas the rate of P application to fields stagnates due to over-fertilization in the Europe already in the 1990ies and continues on a lower rate the use of P in other parts of the world still let the demand on P increase by about 1.4 percent annually. Economists observed price spikes in P fertilizers twice in the 60 years history of exploitation of the P rock reserves in the 1970ies and 2008. According to economic theory increasing prices may indicate a beginning shortage of the resource. If P is getting scarce the Green Revolution would end, the yields may drop down and there would not be enough food to the increasing world population and to feed the livestock and dairy stock. In case of scarcity and allocation of the remaining reserves extends the P problem from the environmental to the economic sphere. The paper deals with the importance of P to life, the broken P cycle, the peak P model, the dimension of the P related food problem, the inefficient P use, the uneconomic P fertilization in fields, new P stocks and solutions to avoid food shortage in future due to the predicted P endowment.