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How a water clean-up may wipe out German wheat exports

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Could a new fertilizer regime spell an end to Germany's role as a key global exporter of quality wheat?

Germany is one of the world's top 10 wheat exporters, and it is particularly important in the market for high-protein milling-grade wheat.

But major market players have raised concerns that pending fertilizer legislation poses a "massive threat" to the industry.

Concerns are that the move could even send German wheat the way of that in neighbour Denmark, where limits on use of nitrogen fertilizers heralded a slump in grain protein levels.

Legal threat

Germany is preparing legislation to enact the European Union nitrates directive, passed by European Commission in 1991.

The German legislation has been delayed by years of political horse trading, as regional governments attempt to protect their farming interests.

However, the federal government is close to pushing through reforms, under mounting pressure from the EU, as nitrate pollution of groundwater in Germany worsens.

Last year, the European environment commissioner threatened to take Germany to the European Union Courts of Justice, if the country failed to comply with the directive.

The legislation, which has been in draft form since the start of the year, contains many threats to current farming practices.

Non-EU German wheat destinations 2013-14

Iran: 2.4m tonnesSaudi Arabia: 1.3m tonnesSub-Saharan Africa: 0.9m tonnesTotal non-EU exports: 6.5m tonnes

"Drastic consequences"

It would, for instance, restrict the use of high nitrogen fertilizers in the post-harvest period, as well as setting limits on the total application of nitrogen fertilizers, and capping the application of phosphorous, another plant nutrient.

The legislation, which is expected to come into force later this year, has prompted unease among industry groups, as the Verein der Getreidehändler der Hamburger Börse (VgD) the German grain trade body warns of "drastic consequences" for Germany's high protein wheat industry.

VgD suggested that the draft legislation posed "a massive threat to Germany's role as an important and reliable supplier of quality wheat in the EU and in third countries".

The group warned that "Germany's position as a reliable supplier of a high proportion of the world's protein supply in human nutrition is at risk".

Industry concerns

German agriculture and energy group Bayerische Warenvermittlung (BayWa) also raised concerns.

"For domestic crop farmers the regulation may cause challenges... especially for the production of quality milling wheat - a top product for German agri exports," BayWa told

And global agricultural group Archer Daniels Midland (ADM) told that it was "concerned about the potential impact of this regulation on the production of high quality German milling wheat".

Danish warning

Indeed, a report issued a month ago, but only recently made public, ADM's German trading arm, formerly known as Toepfer, said that "even if the basic principle of protecting natural resources such as soil and groundwater is undoubtedly to be welcomed, the current form of the draft regulation must be viewed with a highly critical eye.

"It would threaten the role of Germany being one of the most important suppliers of milling wheat in the world."

It cited the Danish example, which imposed limits on fertilizer use some 20 years ago, in stating that the concern that lower yields and protein content have "not been simply plucked out of thin air".

The Danish measure "resulted in a continual fall in the protein content of wheat from 12.0% in 1992 to only 8.4% in 2014".

While the Danish limits on fertilizer use are more severe than those planned by Berlin, "the example nevertheless shows that a remarkable decrease in protein values would occur in Germany, too, if the current draft would indeed be adopted", ADM Germany said.

Depleted reserves

In comments made last year to the Danish Newspaper Jyllands-Posten, the Danish Agriculture and Food Council ascribed the decline in quality directly to the fertilizer legislation.

"The Danish rules mean that we can't give the grain the amount of fertilizer that the plants actually need.

"That results in a gradual depletion of the ground's nitrogen reserves, thus impoverishing the soil.

"As a consequence, the quality gets lower and lower," a spokesman said.

Threat to German supply

ADM Germany added in its report that "it is to be feared that Germany, as a major global grain exporter, would no longer be able to meet the specified quality requirements if the fertilizer regulation was to be adopted in its current form".

It may no longer even be possible to meet domestic requirements for high-quality wheat, the briefing said.

It recommended some loopholes for farmers, such as permitting fertilizer reapplications when weather conditions mean that nutrients will be largely absorbed by crops.

Without some concessions, there is the threat that Germany, "a reliable supplier of quality wheat for human consumption in the world would lose massively in importance."

By William Clarke

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