February 12, 2024
Contact: Christina Dexter, (816)738-5402
Iowa Farmers Union Blasts Proposed Fertilizer Plant Purchase by Koch
The Iowa Farmers Union (IFU) is leading the call for federal and state officials to block the pending sale of OCI Global’s nitrogen fertilizer plant in Wever, Iowa to fertilizer goliath Koch Industries.
The plant was built with more than a half billion dollars of taxpayer support. The state’s largest-ever subsidy was justified as a way to increase competition in the nitrogen fertilizer market. At that time, Iowa Farmers Union joined community leaders and citizen groups opposing the subsidy.
“The proposed sale to Koch would reduce competition, artificially increase prices paid by farmers, and ultimately increase food prices for all Iowans,” said IFU President Aaron Lehman. “It is another painful example of public investments being misused to increase monopolies. We desperately need more competition. This sale must be halted.”
Presently four corporations, (Koch, Nutrien, CF Industries and Yara-USA) control more than 75 percent of the nitrogen supply. At this level of concentration, economists agree that market forces no longer work effectively to keep prices competitive. Fertilizer is one of the ag sectors where anti-competitive concentration is being challenged by the Farmers Union’s ongoing Fairness to Farmers campaign.
The statement from the Iowa Farmers Union Board of Directors follows….
The Iowa Farmers Union — along with18 national ag and policy organizations — is calling on Iowa and federal officials to block the pending sale of OCI Global’s nitrogen fertilizer plant at Wever to industry giant Koch Industries.
The deal will be bad for Iowa farmers, bad for Iowa’s economy, and ultimately bad for consumers paying high food prices. It is a slap in the face for taxpayers who invested about $550 million (as well as $1.2 billion of Iowa Finance Authority bonds) to build the plant, now known as the Iowa Fertilizer Company (IFCo). The stated justification for the tax subsidies was to increase competition in the nitrogen fertilizer supply — a critical input for corn, the midwest’s major crop. In fact, the Brandstad/Reynolds administration cited Koch Industries’ market dominance as the reason why the investment was necessary. Now we are on the cusp of those tax dollars being used to increase Koch’s anti-competitive stranglehold.
To safeguard our economy — and indeed our democracy — our enforcers must prevent dominant firms from capitalizing on investments made with public resources. This deal is yet another example of the consequences of short-sighted public policy focusing only on imagined benefits and ignoring the pitfalls.
Federal regulators at the Federal Trade Commission and the Department of Justice must step in immediately to stop this sale. Iowa’s Attorney General should join with state Attorneys General from around the country to take action.