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FARMING

Norway farmers world’s most subsidised: OECD

Norwegian farmers rake in more in subsidies than those of any other country in the world, with 63 per cent of their income coming from the government, a new study from the OECD has reported.

Norway farmers world's most subsidised: OECD
Heavily subsidised Norwegian cows - NTB Scanpix
The support farmers in Norway received in 2012 jumped from 59 percent of their income in 2011,  as the government sought to offset the impact of a strong currency. 
 
Ken Ash, the Trade and Agriculture Director of the OECD, which groups together 34  of the world's richest countries, called for a reduction in subsidies worldwide. 
 
"The time is ripe for governments to credibly commit to wide-ranging farm support reform," he wrote. "Meeting the needs of a growing and richer world population requires a shift away from the distorting and wasteful policies of the past."
 
The report, which was published on Wednesday, said that countries such as Norway, which already heavily subsidise farmers, had generally increased subsidies over the last year, while countries with lower subsidies had not. 
 
Agriculture Minister Trygve Slagsvold Vedum defended Norway's system.  "If we want food production in our country, this is the way it has to be," he said. 
 
Switzerland had the second largest subsidies, representing 56 percent of farmers' income, in 2012, while Japan had the third largest, making up 55 percent. 
 

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FARMING

Norwegian firm warns high gas prices could impact food production

Soaring prices for natural gas, a key feedstock for producing chemical fertilisers, will weigh on food production and security, a major Norwegian manufacturer warned Wednesday.

Rising gas prices could make food more expensive, Norwegian firm Yara has said. Pictured is the fruit isle on supermarket shelves.
Rising gas prices could make food more expensive, Norwegian firm Yara has said. Pictured is the fruit isle on supermarket shelves.Photo by gemma on Unsplash

Norway-based Yara said that a near fifteenfold rise in European natural gas prices had forced it to reduce its production of ammonia, a key fertiliser component.

“European nitrogen production is essential to global food security, and we are therefore concerned about the impact current European natural gas prices will have, especially for the world’s poorest regions,” chief executive Svein Tore Holsether said in a statement.

As prices for fertilisers rise in the wake of those for natural gas, farmers will be tempted and perhaps forced to cut back on their use. As a consequence, production of food crops could drop.

Holsether pledged Yara will do its utmost to supply farmers and support global food production.

However, he said, “the current situation clearly demonstrates the need for more resilient food supply chains” and called on both government and industry to work together to secure the global food supply.

Rising prices helped Yara’s results overall in the third quarter, with headline sales rising by 46 percent to nearly $4.5 billion.

Operating earnings also improved, but adverse currency effects and writing down the value of a phosphate mining project pushed the firm into a net loss of $143 million.

It earned a net profit of $340 million in the third quarter. Yara shares were up 1.5 percent in afternoon trading, while the main OBX  index was up 1.4 percent.

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