Why are the Department of Commerce and the International Trade Commission considering duties on phosphate fertilizer imports?

The Mosaic Company — the second largest phosphate fertilizer producer in the world — filed a petition with the agencies in June asking for an investigation into phosphate fertilizer imports from certain countries. Mosaic is seeking the imposition of heavy duties (tariffs) on those imports which could result in Mosaic gaining a near-monopoly over phosphate fertilizer supply in America.

How will this affect farmers?

For the average farmer, fertilizer costs can represent 15% of their entire budget, so increased costs would be disastrous. Cost increases could be the difference between making a profit and suffering a loss. Farmers would also have fewer choices and would see supplies tighten, potentially leaving them with less fertilizer than they need. This could lead to crop yields falling and an overall reduction in the production of agricultural goods, which could undermine U.S. agricultural self-sufficiency, while putting U.S. farmers at a disadvantage in world markets.

What would be the effect of duties on phosphate fertilizers?

Phosphorus is an essential element in all plant, animal and human life. Imposing duties on phosphate fertilizers would not only hurt farmers, but it would also create a near monopoly for the one dominant player in the U.S. fertilizer market, The Mosaic Company. The supply of these fertilizers would likely fall as major imorters are forced out of the market, leading to cost increases for already struggling farmers. With a diminished supply of fertilizer, crop yields could fall, production of agricultural goods could be reduced, thereby increasing prices for a wide range of products that American consumers rely upon.

When will a final determination be made on the imposition of countervailing duties?

The U.S. Department of Commerce has made a final determination to impose duties of 19.97% on Moroccan phosphate fertilizers. The U.S. International Trade Commission continues to review the determination. A final decision could come by April 1,2021, which could lock in duties for at least a year or beyond.

Has the agriculture industry and other producers weighed in on the issue?

Yes. A growing list of voices across the agriculture industry have widely criticized the Mosaic petition. The American Farm Bureau Federation, National Sorghum Producers (NSP), Agricultural Retailers Association, National Association of Landscaping Professionals, National Cotton Council of America, USA Rice and Iowa Corn Growers have all written strong letters of concern. Additionally, a group of eight Farm Belt senators have signed onto a letter to the International Trade Commission and the U.S. Department of Commerce opposing the Mosaic petition.

Who should oppose this petition?

Farmers, ranchers, growers, retailers and distributors and others involved in the agriculture economy should be concerned by the Mosaic petition, as it would only exacerbate the challenges that they are already facing. Additionally, anyone who supports fair trade and market competition should be outraged at the attempt to create a near monopoly for one industry player.

What are phosphate fertilizers and what are they used for?

Phosphate fertilizers are fertilizers that contain phosphorus — an essential plant nutrient, along with other key nutrients such as nitrogen and potassium. Countless farmers across the United States use phosphate fertilizers every year to produce a broad variety of crops such as corn, wheat, sorghum, soybeans and cotton, among others.

Who is the OCP Group?

The OCP Group is standing with U.S. farmers to oppose the Mosaic petition. A proud partner of farmers on five continents, OCP Group is a 100-year old company based in Morocco and the world’s largest producer of phosphates. They work across the value chain from mining and manufacturing to research and development of a broad range of innovative, sustainable plant nutrition products.

To better serve American farmers and customers, OCP opened OCP North America in multiple locations to work hand-in-hand with farmers, cooperatives, agricultural institutes and universities to deliver plant nutrition products suited to specific crop and soil needs.

Does the OCP Group receive subsidies or otherwise benefit from the Government of Morocco?

OCP does not benefit from any government subsidy, and pays all applicable duties and taxes in strict compliance with all laws and rules in force. OCP pays substantial fees for its mining activities, following normal practices for companies mining natural resources in the country of Morocco. OCP similarly follows all environmental regulations in Morocco and in every country in which it operates.

What is Morocco’s relationship to the United States?

Mosaic seeks the imposition of duties on phosphate fertilizer imports from Morocco — the global leader in phosphates. Morocco and the United States are valued, long-term allies with a long history of working together bilaterally and regionally, and a strong joint Free Trade Agreement.2 The two countries share common concerns and consult closely on security, political and economic issues. They also have a long-standing and collaborative relationship on trade and share a strong joint Free Trade Agreement. In fact, Morocco was the first country to recognize and open its ports to the newly independent United States on December 20, 1777. The treaty of peace and friendship signed by the two countries in 1786 remains the longest unbroken relationship in U.S. history.