The United States Department of Agriculture (USDA) announces that it will support the production of additional fertilizers for American farmers to meet rising costs, including the impact of Putin’s price hike on farmers , and stimulate competition.
The USDA will make $250 million available through a new grant program this summer to support independent, innovative, and sustainable U.S. fertilizer production to supply U.S. farmers.
Additionally, to address growing concerns about competition in the agricultural supply chain, the USDA will launch a public survey seeking information on seeds and agricultural inputs, fertilizers, and retail markets.
“Recent supply chain disruptions, from the global pandemic to Putin’s unprovoked war on Ukraine, have shown how important it is to invest in this crucial link in the agricultural supply chain here. back home,” Agriculture Secretary Tom Vilsack said.
“The planned investment is an example of the Biden-Harris administration’s many initiatives aimed at bringing production and jobs back to the United States, promoting competition and supporting American goods and services,” Vilsack said.
“As the President said [at the State of the Union], we are working to rebuild the economy towards resilience, security and sustainability, and this support to provide national, sustainable and independent choices for fertilizer supply is part of that effort. In addition to jobs, reduced costs and more reliable supply, increased investment in the domestic fertilizer industry will help fight climate change by reducing greenhouse gas emissions associated with transportation, while promoting more sustainable production methods and more precise application,” he said. .
Fertilizer prices have more than doubled since last year due to many factors including Putin’s price hike, limited supply of relevant minerals and high energy costs, high global demand and prices for agricultural products, reliance on imported fertilizers and lack of competition in fertilizers. industry.
The United States is a major importer and dependent on foreign fertilizers and is the second or third largest importer for each of the three major fertilizer components. The main producers of the main fertilizer components are China, Russia, Canada and Morocco, with Belarus also providing a significant share of potash.
The USDA will use Commodity Credit Corporation (CCC) funds set aside in September for market disruptions to develop a grant program that provides “pick-up” funding to bring new domestic generation capacity online independent, similar to the recently announced meat and poultry. subsidies designed to promote competition and resilience in this sector.
The new program will support the production of fertilizers that are:
Independent – apart from dominant fertilizer suppliers, increasing competition in a concentrated market;
Made in America – produced in the United States by domestic companies, creating well-paying jobs at home and reducing dependence on potentially unstable or inconsistent foreign supplies;
Innovative – improving fertilizer production methods to launch the next generation of fertilizers;
Sustainable – reduces the greenhouse gas impact of transport, production and use through renewable energy sources, raw materials, formulations and encourages greater precision in the use of fertilizer ;
Farmer Focused – Like other Commodity Credit Corporation investments, a key driver will be to provide support and opportunity for US agricultural producers.
Details of the application process will be announced in the summer of 2022, with the first awards expected before the end of 2022.
Under the Biden-Harris administration, the USDA is engaged in a whole-of-government effort to address the climate crisis and conserve and protect our nation’s land, biodiversity, and natural resources, including our soil, air, and water. . Addressing these challenges successfully will require coordination and partnerships with stakeholders along the supply chain, such as the planned investment in the production of innovative domestic fertilizers.
This effort is also part of the Biden-Harris administration’s whole-of-government effort to promote competition, including in agricultural markets.
As part of its efforts to improve fair and competitive markets, the USDA is seeking public comment and information on the impacts of concentration and market power on fertilizers, seeds and other agricultural inputs, and the sale by retail.
Along with these RFIs, the USDA also seeks information on competition and market access for farmers and ranchers, new and growing competitors in the market, especially small and medium-sized businesses, and more on the context of these markets for farmers.
The investigation stems from the July 9, 2021 Executive Order on “Advancing Competition in the American Economy,” which created a White House Competition Council and directed actions by federal agencies to strengthen fairness and competition in the US economy.
“Concentrated market structures and potentially anti-competitive practices leave American farmers, businesses, and consumers facing higher costs, less choice and less control over where to buy and sell, and reduced innovation. , which ultimately makes it harder for those who grow our food to survive,” Secretary Vilsack says. “As I speak to farmers, ranchers and agriculture and food businesses about recent market challenges, I hear significant concerns about whether large companies in the supply chain are taking advantage of the situation by increasing their profits – not just by meeting supply and demand or passing along costs.
The USDA will seek information specifically on:
Seeds and agricultural inputs, particularly with regard to the intellectual property system
Retail trade, including access to retail trade through wholesale and distribution markets.
The comment period will be open for 60 days after the RFIs are posted in the Federal Register, after which comments may be submitted at www.regulations.gov.
The USDA will use the feedback received to develop EO-mandated reports on competition and to develop policies related to fair and competitive markets, supply chain resilience, pandemic response, local and regional food systems and other areas. Subsequent actions can range from new grant and loan programs to additional rules and regulations under the Packers and Stockyards Act of 1921 and other relevant laws to increase fairness and competition in US agricultural markets.