Ag groups want tariff lifted on Moroccan fertilizer

By: - July 29, 2022 12:59 pm

Fertilizers increase crop yields, but farmers must decide whether the benefits are worth the cost. (Photo by Jared Strong/Iowa Capital Dispatch)

The Biden administration should give some immediate, short-term relief to farmers by eliminating tariffs on imported crop fertilizer from Morocco, three prominent agricultural groups say.

The American Farm Bureau Federation, American Soybean Association and National Corn Growers Association have renewed that long-running request in light of the administration’s June decision to temporarily exempt tariffs on solar panels from four countries in Southeast Asia.

The U.S. Department of Commerce has been investigating whether those imported solar panels were actually produced in China and are being exported from the other countries to circumvent tariffs. The threat of retroactively applied tariffs on those panels threaten domestic solar projects, an important aspect of President Joe Biden’s green energy priorities.

The ag groups sent a letter this week to Biden to lift the Moroccan tariffs on phosphate fertilizer that have been in place since last year, which they say have had a “significant negative financial impact” on farmers and ranchers. The African nation is a major producer and exporter of the fertilizer.

“We strongly encourage the White House to eliminate or reduce fertilizer tariffs,” the Monday letter said. “Doing so would make fertilizer more accessible and help American farmers combat global food insecurity.”

Brent Johnson, the president of the Iowa Farm Bureau Federation, said he met this week in Washington, D.C., with a presidential aide to press their case.

“Tariffs are something that can be done with the stroke of a pen and have an immediate impact,” Johnson said.

He was unsure how much of an impact such a move might have on fertilizer costs, but the tariff is 20%.

U.S. Sen. Chuck Grassley said this week he has long opposed the tariff, which was requested by Mosiac Company, the largest domestic producer of phosphate fertilizer. The company said fertilizers produced in Morocco and Russia were unfairly subsidized by their governments.

“Mosiac has 82 percent of the market,” Grassley told Iowa Capital Dispatch on Wednesday. “Why do they need tariffs protecting them from competition with Morocco?”

The ag groups said the prices of six fertilizers peaked earlier this year at record highs, and that they have the potential to affect crop production in future years. They attributed the exorbitant costs to global factors such as natural gas shortages, a reduction of Chinese exports and Russia’s invasion of Ukraine, which has also boosted grain prices.

“In the current year, we are looking to be decently profitable — this is going to turn out to be a good year,” Johnson predicted for Iowa farmers.

But farmers have not yet felt the full effects of the high prices — in part because they might have bought fertilizers before the prices peaked — and next year’s profits are difficult to predict, he said. In the longer term, the Biden administration should help accelerate domestic fertilizer production, Johnson said.

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Jared Strong
Jared Strong

Senior reporter Jared Strong has written about Iowans and the important issues that affect them for more than 15 years, previously for the Carroll Times Herald and the Des Moines Register.