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Biden administration announces plan to help farmers as Russia suspends fertilizer exports

The Biden administration says U.S. investments in domestic fertilizer production will also help address climate change.

By Oliver Willis - March 14, 2022
Tom Vilsack

On Friday, the U.S. Department of Agriculture announced that it would be supporting additional American production of fertilizer for farmers by making available $250 million through a new grant program.

“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,” Agriculture Secretary Tom Vilsack said in a statement.

In addition to acting as a bulwark against global disruptions leading to price hikes on food, Vilsack noted that more domestic fertilizer production would “help address climate change by reducing the greenhouse gas emissions associated with transportation” and lead to more sustainable production.

The Biden administration said the grants would prioritize fertilizer production from independent companies outside of the major suppliers who make their fertilizer in the United States, “creating good-paying jobs at home.”

The day before, Dennis Manturov, Russia’s minister of trade and industry, announced that Russia would be “temporarily” suspending exports of fertilizer, following on an earlier recommendation from the Russian Ministry of Industry and Trade that the Wall Street Journal noted “would likely stoke prices, potentially hurting farmers worldwide.”

Russia has been facing enormous international pressure in response to its unprovoked invasion of Ukraine, including economic sanctions imposed by the United States, the United Kingdom, and the European Union. The value of the ruble, Russia’s currency, has collapsed as the nation has been economically isolated.

Russia is the world’s largest exporter of fertilizers, and the United States imports over a million tons of the materials each year. According to the United Nations, America paid Russia $1.28 billion for fertilizers in 2021.

Alexis Maxwell, an analyst for Bloomberg’s Green Markets website, which covers the fertilizer industry, said in early March, “Losing Russia and their large export volumes would be a severe supply-side shock to the market.”

The investments from the Biden administration are not likely to immediately counteract the impact of Russia’s actions, but Vilsack said the initiative is part of Biden’s efforts to “rebuild the economy toward resilience, security, and sustainability.”

Bloomberg’s Maxwell said that replacing the volumes of fertilizer produced by Russia “would take nearly half a decade at the very best.”

Published with permission of The American Independent Foundation.

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