What if I told you that a major fertilizer company had used the government to help it monopolize the U.S. market while placing an undue burden on farmers? There is no way the government would do that nor would a company do that to the customers they are supposed to be serving, you say? Think again.
That scenario is exactly what has happened in recent months, and North Dakota farmers are paying the price.
Farmers in and outside North Dakota were already finding it hard to secure and pay for fertilizer, seed and crop protection products thanks to a host of factors ranging from restrictive trade practices to gas shortages. But a recent move by the International Trade Commission (ITC) to place tariffs on phosphorus fertilizers imported from Morocco and Russia have made a bad situation worse.
The ITC’s move was orchestrated by the fertilizer producer Mosaic Co., which filed a petition challenging the trade practices of fertilizer companies in those two countries. Never mind that Mosaic already controlled 75 percent of the market, which grew to 80 percent once the tariffs were put in place.
To further complicate matters, CF Industries, another U.S. fertilizer producer, followed Mosaic’s lead and petitioned the ITC to place tariffs on fertilizers imports from Russia and Trinidad & Tobago. The ITC recently recommended the petition be granted.
Meanwhile, North Dakota farmers are struggling thanks to Mosaic’s tariffs, and they are bracing for the impact of tariffs to be brought on by CF Industries. Experts are predicting these factors will land a major blow to the budget of family farms in the year ahead.
In fact, economists at the University of Illinois recently released projections showing that fertilizer prices could lower the net incomes of farmers in that state by 34 percent in 2022. Farmers in North Dakota, already paying as much as 200 percent or more on tariffs compared to last year, say the projections are probably modest. They’re expecting a huge hit to their incomes in the year ahead.
So, what can be done to address this crisis? A complaint has been filed against Mosaic in the U.S. Court of International Trade. The National Corn Growers Association, along with other agricultural groups, have filed an amicus brief encouraging the court to eliminate the tariffs. But the court is not expected to rule before 2022, which means farmers will have to suffer through at least another year.
Ironically, to quickly cure this situation, we need the help of the very companies that have created this mess. Mosaic and CF Industries have the power to withdraw their petitions. In Mosaic’s case, such a move would result in eliminating the tariffs and providing relief to farmers. In the case of CF Industries, the ITC’s recent recommendation related to nitrogen fertilizers would be null and void, taking an additional burden off family farms.
How could removing the petitions help these companies? The executives at CF Industries and Mosaic should realize that it’s not a good idea to spike short-term earnings at the expense of long-term customer relationships. If tariffs break the backs of family farms, that’s less money for future purchases of fertilizers.
Monopolizing the fertilizer market at the expense of the American farmer is not a good look for these companies. The public, policymakers and other industry allies are watching what’s happening and are not likely to sit idly by and let corporations take advantage of farmers.
While it may not seem like an expedient move to Mosaic and CF Industries, taking a burden off the backs of farmers by withdrawing the tariffs is in the best long-term interest of these companies.
I hope that good judgement and moral rectitude will prevail, and these companies will withdraw their petitions. And the sooner, the better. Meanwhile the Corn Growers Associations will continue to use every tool to fight for growers in the state. Become a member to support this and other efforts towards our mission: “Growing a healthy, profitable business climate for northern corn.”
Rob Hanson, is a corn grower from the Wimbledon area and President of the North Dakota Corn Growers Association, which advocates at the state and federal level of government for the more than 13,000 corn growers in the state, and has since 1987. For more information or to join, go to www.ndcorn.org/corngrowers
