Rep. Berry (D-Ark.) introduces bills to lower fertilizer costs

Doane Agricultural Services filed the following report on our content site this morning:

7/27/2006 -- U.S. Representative Marion Berry (D-Ark.) introduced two pieces of legislation Wednesday to suspend the import duties on urea and ammonium nitrate fertilizers and lower the price of fertilizer for America's farmers.

Some industry experts estimate fertilizer prices could drop by as much as 50 percent if the International Trade Commission removed existing tariffs and allowed other countries to export urea and ammonium nitrate fertilizers to the United States.

"The demand for fertilizer here in the United States far exceeds what we are able to supply through domestic production," said Berry. "Instead of penalizing America's farmers, it is time to open our market to other countries capable of producing fertilizer at a much lower price. This will not only provide financial relief for farmers all across rural America, put protect the long-term viability of our domestic food supply."

The legislation (H.R. 5879 and H.R. 5880) has been endorsed by the USA Rice Federation and appears to be consistent with the policy position of the Agricultural Retailers Association as presented when trade issues were up for consideration before the U.S. International Trade Commission. H.R. 5879 would terminate the limitations in imports of ammonium nitrate from the Russian federation, and H.R. 5880 would suspend the antidumping duty orders on imports of solid urea from Russia and the Ukraine.

Fertilizer prices have increased by 86 percent since 1990, leaving many farmers struggling to stay in business, Berry's news release explained. The price of fertilizer is directly related to the price of natural gas - which is on the rise in the United States. Since natural gas accounts for 70-90 percent of the production costs for nitrogen fertilizer.

Unlike the United States, countries like Russia and the Ukraine have a supply of natural gas at a consistently low price. Fertilizer producers in those countries spent one-twelfth of what producers here in the United States spent for a unit of natural gas last year, Berry explained. Berry's bills would allow these countries to export large quantities of nitrogen fertilizer to the United States, with the expectation of driving down the price of fertilizer for America's farmers.

"The tariffs on fertilizer imports are simply outdated," said Berry. "Instead of protecting domestic fertilizer producers, they are only driving prices up for our farmers. We need a new system that gives our farmers the best deal for their agricultural products."

The International Trade Commission issued tariffs on urea and ammonium nitrate in the late 1980's to protect domestic fertilizer producers. Since then, domestic fertilizer production has plummeted significantly, with the number of domestic producers dropping from 24 in 1987 to just 7 today.

Berry's legislation is unlikely to be voted on by the House this year, but it is the initial step that lays the ground work for congressional action in the future.

SOURCE: News release from U.S. Rep. Marion Berry

• AgFax News, Downloads
• Subscribe to our reports

.