President Carter yesterday embargoed the export to the Soviet Union of phosphate materials, used for fertilizer and feed grain, in a further effort to show his displeasure with the Russian military presence in Afghanistan.
The move, intended to back up Carter's embargo on grain, bans for an indefinite period the export of phosphate products, including superphosphoric acid, which Commerce Department officials said the Soviets were counting on to operate seven new fertilizer plants. A temporary embargo on phosphate exports began Feb.6.
Administration officials have said that the embargo won't have an immediate effect on Soviet crop production but it could put kinks in the Russians' long-range crop and fertilizer production plans.
The United States is the world's largest exporter of superphosphoric acid, nearly all of which is supplied to the Soviets by Occidental Petroleum Co. which has a 20-year, $20 billion agreement to ship them the material in exchange for ammonia. Phosphate sales to the Soviets last year totaled $97 million and were expected to reach $400 million this year.
Other countries such as Morocco -- with which the Soviets reportedly have been negotiating in case a U.S. embarge occurred -- supply lower grades of phosphoric acid and could produce the higher grade for them, Commerce officials said.
But a National Security Council official said last night that exporting countries have been asked not to make up the Soviets' shortfall. "We don't want to interfere with their regular market activities," the official said. "But we don't want them to take advantage either."
The Soviets could retool their own plants to use lower-grade phosphoric acid or make their own in renovated plants, Commerce officials said. They could do it relatively inexpensively, but it would take at least two years, they said.
The action came following congressional and Cabinet-level pressure to embargo the phosphates, particularly since Carter stopped shipments of 17 million metric tons of grain last January to the Soviets. The critics argued that the Soviets could boost their crop output to offset the grain embargo using U.S.-supplied fertilizer.
But Senate critics last week said they were perturbed that any action on phosphates took more than 50 days when the grain was embargoed after only 7 days.
"Although it's late in coming, the embargo is still most welcome," Sen. J.
James Exon Jr. (D-Neb.) said yesterday. "As long as the Great Bear remains unfriendly, the U.S. will neither feed him nor supply him with fertilizer to help grow his own feed."
Agriculture Department and National Security Council officials reportedly supported the export ban.
"The president's decision today, which is being taken in the interest of U.S. foreign policy, forcefully demonstrates our refusal to do business as usual with the Soviets," Commerce Secretary Philip M. Klutznick said
Occidental Petroleum, whose contract was placed in jeopardy by Carter's action yesterday, said that since December it has made contingency plans for marketing it phosphates in the event of an export ban.
"Dr. Armand Hammer has on several occasions informed the administration that as an American company we will support our government's decisions," a company statment said.
The company also said that the ban "will result in increased fertilizer cost to the U.S. farmer, and ultimately this increase will be reflected in higher food prices."
At a Senate committee hearing last week, Agriculture Department economist Howard J. Hjort said that American farmers wouldn't suffer this year from a phosphate embargo combined with a halt in Russian shipments of nitrogen fertilizers here. He said that an increase in nitrogen fertilizer costs would be offset by a reduction in prices of phosphates.
"The most significant domestic impact would tend to fall on the Southeast region which is most heavily dependent on Russian ammonia imports," Hjort said.
Soviet crop production also wouldn't be hurt this year by a phosphate embargo, but the Russians could face slight reduction in crops during the following years, Hjort said.