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Rabat – A group of US Republicans this week requested that US President Joe Biden use his authority to lift import duties on Moroccan phosphate-based fertilizers.
US farmers are “making decisions on what to plant today based on fertilizer prices rather than typical market fundamentals,” the 31 signing lawmakers lament in a letter to President Biden.
Led by Senator Roger Marshall and Congresswoman Tracey Mann, 27 members of US Congress signed onto a letter demanding Biden waive import duties the US International Trade Commission (ITC) imposed on Moroccan fertilizers on March 12, 2021.
The group directly blamed Biden for the market-distorting import duties, writing: “Your Department of Commerce and U.S. International Trade Commission (ITC) imposed duties on imports of Moroccan phosphate and is in the process of imposing duties on UAN from long-time supplier Trinidad and Tobago.”
Whether Biden is to blame for an ITC decision made two months after his inauguration is unclear, yet the hardship that the import duties have created for US farmers echoes in the pages of the letter.
‘Not in normal circumstances’
“America is facing a serious supply shortage of fertilizers, leading to record high fertilizer prices,” the group highlighted in its letter to the US president, explaining that the US can ill-afford these duties within the current domestic and global contexts.
On the domestic front, the group described the current context as complicated by “inflation at the highest it has been in 41 years and a Consumer Price Index for food up 14.6%, the rising cost of fertilizer will increase food insecurity and geopolitical tension domestically and abroad.” They emphasized, “We certainly are not in normal circumstances.”
The group of senators and congresspeople is demanding that the Biden administration provides relief to farmers through presidential powers. “You have the authority to provide farmers with immediate relief from these inflationary tariffs,somewhat similarly as you did for the solar industry,” the lawmakers wrote, referring to a June 6 decision that lifted tariffs for imports from four countries.
The 31 Republicans added that ”justifications mentioned in your June 6 Proclamation are far more applicable to shortages farmers face with fertilizer than any emergency concerning solar panels, as the subsequent decrease in food production will increase prices at the grocery store and increase food insecurity.”
The letter concludes by highlighting that “the bottom line is that fertilizer is critical to national security and national defense. Its affordability is also critical to wrangling out-of-control inflation.”
Another attempt
With the US economy facing a potential recession, rising inflation, severe supply chain issues and high fuel costs, American farmers are facing high fertilizer costs that impact their livelihood and the production of food on a national scale.
Several times US lawmakers have attempted to lift the unpopular fertilizer duties, even before the current economic difficulties Americans are facing.
In April of 2021 think tank The Heritage Foundation called on congress to reverse the market-distorting phosphate duties. As food prices and prices of vital agricultural inputs started to rise, communities and US farmers started to highlight the coming difficulties.
In March US congresspeople similarly proposed waivers that would have exempted Moroccan fertilizers from the ITC’s import duties. Still, the import duties stood despite growing hardship for local food producers.
Many communities and farmers have pointed to US phosphate giant Mosaic as the main source of the unpopular decision to levy import duties on some foreign phosphate-based imports.
The decision, which was the result of intense lobbying by the Florida-based phosphate company, in effect gave the US company a monopoly over the US phosphate market by raising the costs of its competitors in Morocco and Russia.
Mosaic’s monopoly
In May, Mosaic publicly stated that it was “working to mitigate some of the impact of reduced global supply by efficiently maximizing output,” as it leveraged its artificial monopoly amid growing concerns of a global food security crisis.
“As the second-largest phosphate fertilizer producer in the world, Mosaic has almost single-handedly erected an insurmountable tariff barrier to keep its top competitors in Morocco and Russia out of the U.S. phosphate market,” a letter by the National Corn Growers Association (NCGA) lamented in December 2021.
“The company’s monopoly is creating serious problems for farmers,” the NCGA highlighted, adding that “experts say that using Commerce and ITC to manipulate the supply curve does indeed dictate price to farmers.”
Biden’s response to the most recent call to lift import duties will likely face heavy resistance from Mosaic’s lobbying arm, which has already spent $250,000 on lobbying since the start of the year. The company has spent between $700,000 and $1 million annually on lobbying since 2017, likely seeing the ITC decision as its lobbyists’ crown achievement.
Facing opposition from Mosaic’s lobbyists and the lawmakers they influence, Biden’s response to calls to lift duties on Moroccan fertilizers could reveal whether his administration cares more for struggling farmers, or the giant phosphate producer that is enjoying an effective monopoly on the US fertilizer market.
