Phosphate Import Taxes: Effect on Farmers

Mosaic Company’s Petition for Phosphate Import Taxes

On June 26, 2020, Mosaic Company sent a petition to the United States International Trade Commission and Department of Commerce requesting “The Imposition of Countervailing Duties” on Moroccan and Russian Imports of Phosphates. 

The petition requests a 30.72% tax on imports from Russia and a 71.5% tax on imports from Morocco. 1 On August 7, 2020, the U.S. International Trade Commission voted to pursue an investigation concerning the phosphate fertilizers being imported from Morocco and Russia, based on Mosaic’s request, and the commission’s preliminary determinations are due on or about September 21, 2020. 2

Mosiac Company owns a majority of the phosphate production for fertilizers in the United States and a majority of the mines in Florida, where 75% of the phosphate in the United States can be found. 3 Imposing tariffs on phosphate imports from Morocco and Russia would increase the prevailing cost of phosphates in the United States and allow the Mosaic Company, with its $19 billion-plus assets, to charge more for its phosphate fertilizers. 4

Phosphorous Fertilizer and American Farms (5) 

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How This Affects Farmers

Phosphorous is a crucial primary nutrient for the growth of crops ranging from corn, soybeans, cotton, wheat, sugar beets, fruits and vegetables,and many other important crops across the country. Phosphate fertilizers represent a significant portion of the delicate mix of crop feeding products and cannot simply be replaced with an alternative product.

Levying import taxes against phosphate imports would directly and significantly increase the cost of phosphate fertilizers in America. As a crucial product for American farmers of a multitude of crops nationwide, it would put a universal strain on the American agriculture industry to the tune of $480 - $640 million additional taxes. 6

Farmers Are Struggling

American Farmers have already been negatively impacted by the global pandemic and needless trade wars. 

Disruptions in supply chains resulting from the pandemic have caused retail prices to increase, but producer prices to fall. Land values have also become uncertain, as many more farmers than usual are selling land in order to stay afloat financially. Fertilizer supplies and prices have been stalwart during the pandemic. Mosaic company’s petition would disrupt one of the only stable aspects of farming in 2020. 

References

  1. Riley, Bryan. “The Government Should Not Hike Taxes on Farmers.” National Taxpayers Union. www.ntu.org, https://www.ntu.org/oundation/detail/the-government-should-not-hike-taxes-on-farmers. Accessed 3 Aug. 2020.

  2. U.S. International Trade Commission, Press Release: USITC Votes to Continue Investigations Concerning Phosphate Fertilizers from Morocco and Russia,” 7 August 2020. https://www.usitc.gov/press_room/news_release/2020/er0807ll1621.htm. Accessed 14 September 2020.

  3. “History of Phosphate Fertilizer Production.” History of Phosphate Fertilizer Production, http://www.fipr.state.fl.us/about-us/phosphate-primer/history-of-phosphate-fertilizer-production/.

  4. “Mosaic (MOS).” Forbes. www.forbes.com, https://www.forbes.com/companies/mosaic/. 

  5. Schlegel, Paul. Investigation Nos. 701-TA-650-651 (Preliminary) Phosphate Fertilizers from Morocco and Russa. 21 July 2020, https://static1. squarespace.com/static/5f24936a712f3f6ac8f9e12d/t/5f249852cc2737238b48ffbf/1596233811266/AFBF+715232-1558433.pdf.

  6. Young, Bob. Opinion: Don’t Make America’s Farmers Pawns in Game of Crony Capitalism. 30 July 2020. www.agri-pulse.com, https://www.agri-pulse. com/articles/14170-opinion-dont-make-americas-farmers-pawns-in-game-of-crony-capitalism.

  7. Chinn, Menzie, and Bill Plumley. “What Is the Toll of Trade Wars on U.S. Agriculture?” PBS NewsHour, 16 Jan. 2020. www.pbs.org, https://www.pbs. org/newshour/economy/making-sense/what-is-the-toll-of-trade-wars-on-u-s-agriculture

Ainsley Shea