Democrats in the Iowa House are raising concerns about the pending sale of a southeast Iowa fertilizer plant. Koch Industries plans to buy the Iowa Fertilizer Company near Wever for $3.6 billion.
Representative J.D. Scholten of Sioux City says four companies already control 75% of the nitrogen fertilizer market in the U.S. “Ask any row crop farmer and fertilizer is one of the number one costs they’ll bring up as an issue,” Scholten says. “This issue is not new and this is what Governor Branstad did when he gave to tax breaks to the Iowa Fertilizer Company over 10 years ago to create competition in the market.”
In 2012, the State of Iowa provided $112 million in tax credits and loans for the project. Lee County provided a $30 million dollar property tax abatement. Representative Elinor Levin, a Democrat from Iowa City, says state officials need to ensure Koch meets the terms for those incentives.
“Governor Branstad, when he awarded all of these tax incentives, pointed to competition specifically with Koch Industries as a reason to provide these incentives,” Levin says. “Well, now they’re being provided and incentivizing Koch to buy here in Iowa.”
Scholten says the other concern is what happens to the 260 Iowa Fertilizer Company employees. “When the company has their monopoly power and they have record profits for these companies and they have these CEOs making huge amounts of money where workers get left behind, it’s a constant theme throughout our nation,” Scholten says, “so there’s nothing that won’t be the same.”
Koch’s acquisition of the southeast Iowa plant is being reviewed by federal anti-trust regulators, House Democrats have sent a letter to the U.S. Justice Department, the Federal Trade Commission and Iowa Attorney General Brenna Bird that outlines concerns about the sale.
Koch Industries already operates a fertilizer plant in Fort Dodge.