The war involving Iran and the continued blockade of the Strait of Hormuz are beginning to ripple through global agriculture, with rising fertiliser costs threatening food production and pushing farmers under increasing financial strain.

A new World Bank report warns that soaring energy prices and disrupted trade routes have created a severe fertiliser squeeze, driving affordability for farmers to its lowest level in four years. The crisis is being fuelled largely by a sharp rise in natural gas prices, a key ingredient in the production of nitrogen-based fertilisers.

Because fertiliser production is closely tied to energy markets, any spike in gas prices quickly translates into higher costs for farmers. That dynamic is now raising concerns about the impact on future harvests, particularly in regions already facing economic and food security challenges.

European agriculture ministers are reportedly discussing emergency measures to shield farmers from escalating costs and to protect grain production for next year. While Europe is not currently facing an immediate supply shortage, industry groups say the pressure on farm finances is intensifying.

A spokesperson for Fertilisers Europe said the continent remains relatively well supplied, thanks to strong domestic production and high import levels in recent months. Europe typically meets around 70% of its fertiliser demand through its own output.

However, the organisation warned that farmers are operating on increasingly narrow margins. It called for targeted support from European Union institutions while also ensuring that assistance does not undermine the competitiveness of the region’s fertiliser industry.

The situation is more severe outside Europe. According to the UN Food and Agriculture Organization, shipping disruptions through the Strait of Hormuz have caused significant fertiliser shortages across Asia, the Middle East and parts of Africa.

Countries including India, Bangladesh, Sri Lanka, Egypt, Sudan and several nations in sub-Saharan Africa are facing rising costs, reduced availability and growing risks to food security.

Analysts warn that if farmers cut fertiliser use to save money, crop yields could fall sharply in the next planting season. Research from the International Food Policy Research Institute suggests that reduced application rates would likely lower global grain production and tighten food supplies.

The FAO’s Food Price Index has already begun to rise, reflecting mounting concerns over input costs and supply disruptions. Higher transport expenses and logistical challenges linked to the conflict are expected to place additional upward pressure on food prices in the months ahead.

For many developing economies already struggling with inflation, the impact could be especially severe. Policymakers may face difficult choices as they seek to balance economic stability with food affordability.

Experts say the crisis underscores the importance of securing not only food supplies, but also the essential inputs that make food production possible. Without a stabilisation of energy markets and a restoration of normal shipping routes, the effects of the Iran conflict could linger far beyond the battlefield.

The European Union is moving toward one of the biggest changes to its payments system in decades, with the proposed launch of a digital euro potentially arriving by 2029. But before that can happen, lawmakers must overcome growing resistance from banks, privacy campaigners and some members of the European Parliament.

The digital euro would function as electronic cash issued by the European Central Bank, designed to complement physical banknotes rather than replace them. Under current plans, consumers would use a digital wallet for everyday purchases, both online and offline. Transactions made offline would offer a high degree of privacy, similar to cash.

If legislation is approved by the end of 2026, the new payment system could be available to consumers three years later.

The project has taken on added urgency as Europe seeks greater financial independence. American companies Visa and Mastercard currently dominate card payments across the eurozone, accounting for most cross-border transactions. European officials see the digital euro as a way to reduce reliance on foreign payment providers and strengthen the bloc’s monetary sovereignty.

The proposal also comes as private digital currencies gain ground globally. While the United States is moving to regulate privately issued stablecoins and China has already rolled out its digital yuan, Europe is pursuing a state-backed alternative under strict public oversight.

Commercial banks, however, have voiced strong concerns. They argue that a digital euro could draw deposits away from traditional banks by allowing consumers to hold money directly with the central bank. Banking groups also warn that granting the digital euro legal tender status would force merchants to accept it, potentially disadvantaging private payment services.

Supporters counter that this is precisely the point. They argue that public money must remain available in digital form, just as physical cash is today.

The debate has become especially intense in the European Parliament, where Spanish lawmaker Fernando Navarrete Rojas is overseeing the legislation. Navarrete has expressed skepticism about the project, questioning its urgency and arguing that private-sector solutions may be more efficient.

His efforts to limit the digital euro to offline use only, a move that would significantly reduce its scope, were ultimately dropped after opposition from other political groups. Socialists, liberals, Greens and left-wing lawmakers have broadly supported the European Commission’s proposal.

Despite the disagreements, negotiations are progressing. A committee vote is expected by the end of June, followed by a full parliamentary vote at a later date.

If approved, the legislation will move into final negotiations between the Parliament, the European Commission and EU member states. Those talks are expected to continue through 2026, setting the stage for a digital euro that could reshape how millions of Europeans pay for goods and services.