USDA announces plans to support
innovative American-made fertilizer
Seeks public input to identify
competition challenges in seed, fertilizer, other agricultural inputs,
and retail markets
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“Recent supply chain disruptions
from the global pandemic to Putin’s unprovoked war against Ukraine
have shown just how important it is to invest in this crucial link in
the agricultural supply chain here at home,” said Agriculture
Secretary Tom Vilsack. (U.S. Department of Agriculture, Public Domain)
WASHINGTON — The U.S. Department of
Agriculture (USDA) is announcing it will support additional fertilizer
production for American farmers to address rising costs, including the
impact of Putin’s price hike on farmers, and spur competition. USDA
will make available $250 million through a new grant program this
summer to support independent, innovative and sustainable American
fertilizer production to supply American farmers. Additionally, to
address growing competition concerns in the agricultural supply chain,
USDA will launch a public inquiry seeking information regarding seeds
and agricultural inputs, fertilizer, and retail markets.
“Recent supply chain disruptions from the
global pandemic to Putin’s unprovoked war against Ukraine have shown
just how important it is to invest in this crucial link in the
agricultural supply chain here at home,” said Agriculture Secretary
Tom Vilsack, “The planned investment is one example of many Biden-Harris
Administration initiatives to bring production and jobs back to the
United States, promote competition, and support American goods and
services. 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 domestic, sustainable and
independent choices for fertilizer supplies is part of that effort. In
addition to the jobs, lower costs and more reliable supply, increased
investment in the domestic fertilizer industry will help address
climate change by reducing the greenhouse gas emissions associated
with transportation, while also fostering more sustainable production
methods and more precise application.”
Fertilizer prices have more than doubled
since last year due to many factors including Putin’s price hike, a
limited supply of the relevant minerals and high energy costs, high
global demand and agricultural commodity prices, reliance on
fertilizer imports, and lack of competition in the fertilizer
industry.
The United States is a major importer and
dependent on foreign fertilizer and is the second or third top
importer for each of the three major components of fertilizer. The top
producers of the major components of fertilizer include China, Russia,
Canada and Morocco, with Belarus also providing a significant share of
potash.
USDA will use funds from the Commodity
Credit Corporation (CCC) set aside in September for market disruptions
to develop a grant program that provides ‘gap’ financing to bring new,
independent domestic production capacity on-line—similar to the
recently announced meat and poultry grants that are designed to
promote competition and resilience in that sector.
The new program will support fertilizer
production that is:
Independent – outside the dominant
fertilizer suppliers, increasing competition in a concentrated
market;
Made in America – produced in the
United States by domestic companies, creating good-paying jobs at
home and reducing the reliance on potentially unstable or
inconsistent foreign supplies;
Innovative –improve upon fertilizer
production methods to jump start the next generation of fertilizers;
Sustainable – reduces the greenhouse
gas impact of transportation, production, and use through renewable
energy sources, feedstocks, formulations, and incentivizing greater
precision in fertilizer use;
Farmer-focused – like other Commodity
Credit Corporation investments, a driving factor will be providing
support and opportunities for U.S. agriculture commodity producers.
Details on 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,
USDA is engaged in a whole-of-government effort to combat the climate
crisis and conserve and protect our nation’s lands, biodiversity and
natural resources including our soil, air and water. Successfully
meeting these challenges will require coordination and partnerships
with stakeholders throughout the supply chain such as the planned
investment in innovative domestic fertilizer production.
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 enhance
fair and competitive markets, USDA is requesting comments and
information from the public about the impacts of concentration and
market power in fertilizer, seeds and other agricultural inputs, and
retail. With these RFIs, USDA is also seeking information on
competition and market access for farmers and ranchers, new and
growing market competitors, especially small and medium-sized
enterprises, and more about the context for these markets for farmers.
The inquiry stems from the July 9, 2021, Executive Order on “Promoting
Competition in the American Economy,” which created a White House
Competition Council and directed federal agency actions to enhance
fairness and competition across America’s economy.
“Concentrated market structures and
potentially anticompetitive practices leave America’s farmers,
businesses, and consumers facing higher costs, fewer choices and less
control about where to buy and sell, and reduced innovation—ultimately
making it harder for those who grow our food to survive,” said
Secretary Vilsack. “As I talk to farmers, ranchers and agriculture and
food companies about the recent market challenges, I hear significant
concerns about whether large companies along the supply chain are
taking advantage of the situation by increasing profits—not just
responding to supply and demand or passing along the costs.”
USDA will seek information specifically
on:
Fertilizer.
Seed and agricultural inputs, in
particular as they relate to the intellectual property system.
Retail, including access to retail
through wholesale and distribution markets.
The comment period will be open for 60
days once the requests for information are published in the Federal
Register, and upon which time comments can be submitted to www.regulations.gov.
In the interim, the requests for information will be made available
at www.ams.usda.gov/about-ams/fair-competitive/rfi.
USDA will use the comments received to
develop reports mandated under the Competition E.O., and to develop
policies relating to fair and competitive markets, supply chain
resiliency, pandemic response, local and regional food systems, and
other areas. Subsequent actions may 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 American agricultural markets.
USDA touches the lives of all Americans
each day in so many positive ways. In the Biden-Harris Administration,
USDA is transforming America’s food system with a greater focus on
more resilient local and regional food production, fairer markets for
all producers, ensuring access to safe, healthy and nutritious food in
all communities, building new markets and streams of income for
farmers and producers using climate smart food and forestry practices,
making historic investments in infrastructure and clean energy
capabilities in rural America, and committing to equity across the
Department by removing systemic barriers and building a workforce more
representative of America. To learn more, visit www.usda.gov.
