Illinois farmers face exploding fertilizer costs due to U.S. government-imposed tariffs
One of the key industries in the Illinois economy – agriculture – is being threatened by unnecessary tariffs on fertilizer imports and it’s driving up the cost of food. As inflation hits a new 40-year high and Illinois families feel the impact at the grocery store, it’s time for these tariffs to go.
Illinois is known and respected worldwide as a significant producer of agricultural products. About 75 percent of the state’s total land area is devoted to farms, growing commodities that contribute $19 billion to the state economy. Illinois agriculture employs nearly 1 million people, doing work that puts meals on American tables and helps keep grocery prices down.
Much of the Illinois ag sector’s productivity depends on fertilizers. But the cost of that key agricultural component is skyrocketing out of control. Several variables contribute to rising fertilizer prices but one that is completely controllable is the cost added by duties imposed by the U.S. International Trade Commission (ITC).
In recent years, the ITC took up a request from the Mosaic Company, a giant corporation looking to increase profits by stifling the competition, and imposed a countervailing duty on imported phosphate fertilizer from Morocco. It’s an unfortunate example of crony capitalism, with government policy decisions unfairly benefiting one company over another. As always, consumers eventually pay the cost.
Additionally, the ITC announced last July that it intends to impose duties on urea ammonium nitrate (UAN) fertilizer products from Trinidad and Tobago. They have begun collecting preliminary cash deposits on those imports, essentially enforcing the planned tariff before it is in place. Unsurprisingly, the ITC’s actions have caused the price of UAN benchmark product anhydrous ammonia to increase by well over 200 percent.
As the Biden administration scrambles for ways to rein in rapidly rising consumer costs for food and other essentials, you would think repealing these tariffs would be at the top of the list.
A number of U.S. House members and Senators certainly think it’s a good idea. More than 80 of them recently sent a letter to the ITC, pointing out that reversing these tariffs would be an immediate way to at least partially remedy the high cost of fertilizer for farmers and, in turn, the retail cost of the food those farmers provide. Several representatives from Illinois signed the letter, including Rep. Cheri Bustos.
Tariffs have the same effect as taxes; they increase production costs and consumers ultimately suffer the consequences. Morocco and Trinidad and Tobago are longtime U.S. allies and valued trading partners. There is no legitimate reason to punish them with tariffs that, in the long run, hurt American farmers and families. Let’s hope all members of Illinois’ congressional delegation stand up for our state’s agricultural community by speaking out against the tariffs.