Vaden talks fertilizer, regulations, national security

Agriculture Deputy Secretary Stephen Vaden said Tuesday the Trump administration wants to increase domestic fertilizer production and is taking a number of steps toward regulatory reform, including improving the reporting of foreign ownership of agricultural land.

In a speech to the Agricultural & Food Law Policy Briefing sponsored by the National Agricultural Law Center and the NASDA Foundation in USDA’s Jefferson Auditorium, Vaden said control of 70% of the nitrogen fertilizer market by four firms and 100% of the potash market by two firms “raises legitimate questions about whether prices consumers are paying reflect the actual market price.”

He said he is pleased the Justice Department has opened an investigation into whether the fertilizer industry is operating in the free market as required under anti-trust law. He and Rollins have found the Justice Department “to be a reliable partner,” Vaden said.

Vaden noted that the International Trade Commission is looking at a sunset review of countervailing duties on fertilizer from Morocco. Those duties have cost American farmers an additional $6.9 billion in additional phosphate fertilizer expenses, he said.

Agriculture Secretary Brooke Rollins has told reporters that there is debate within the administration about whether the countervailing duties on Moroccan fertilizer should be lifted, but Vaden was harshly critical of the duties. He pointed out Tuesday that there have been no major announcements of an increase in the phosphate fertilizer supply while the duties have been in place. The duties were put in place on the grounds that the Moroccan fertilizers created unfair competition to domestic sources. 

“That translates into a cost of $6.9 billion with no clear return to the American farmer,” he said. Farmers should participate in the public process of the sunset review, he said.

“With nitrates, we have an ace in the hole,” because unlike Europe the United States is not engaging “in a war on fossil fuels,” he said. The biggest expense in making nitrate fertilizer, he said, is energy, and energy “is cheaper in the United States” than in any other modern western economy “because we have the right energy policy.”

USDA is looking at funding fertilizer projects using programs set up under previous administrations and new ones, he said. U.S. companies are interested in increasing fertilizer production, but he could not share details at this time, he said. 

Asked about organic fertilizer, Vaden said his own family uses chicken litter on their farms in Tennessee and Kentucky and that the 45Z tax credit, which is yet to be finalized, could provide tax benefits to farmers who use chicken litter.

Vaden said one of his biggest disappointments has been the role of state and local governments in blocking projects due to regulations and “nimbyism,” a reference to the “not in my back yard” attitude.

“If the U.S. is going to continue to lead the world in agricultural productivity, we need to ensure that government is working at all levels,” he said.

He also praised the Trump administration for using Federal Register notices to make changes to the National Environmental Policy Act to return NEPA to the role that Congress intended when it passed the law in the 1970s. NEPA is about a public process, “not about outcome determination,” he said.

He noted that USDA has closed the comment period on line speeds in meat production. He said that Canada, “which is controlled by the Labor Party with an economic platform that is avowedly socialist,” and European countries including Scandinavia, allow faster line speeds than would be allowed under the rule that the Trump administration is finalizing.

Vaden said he hopes “our friends in the labor unions” will “take cues from the Canadians and the Europeans” in order to provide “food at reasonable price for Americans.”

On foreign ownership of agricultural land, Vaden said USDA is moving to update systems for the 21st century.

On California’s Proposition 12, a law that requires pork sold in the state to come from animals raised under certain conditions, Vaden said, “I hope to see it blown up.” He added it is inappropriate for states to regulate interstate commerce. (Prop 12 covers meat from animals raised anywhere in the country.)

Evidence shows Prop 12 has raised the cost of pork, especially in California, he said.

There is better “integration” among Cabinet officers in the Trump administration than in previous administrations, and officials in Homeland Security, Treasury and Commerce are focused on food security in a way that others have not been, Vaden said.