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BOTTOM LINE
Issues impacting your operation
The 2014 Illinois Farm Bureau Policy Development Supplement
Proposed rule makes farming difficult Issue: ‘Waters of the U.S.’
In March, the U.S. Environmental Protection Agency (EPA) and the United States Army Corps of Engineers (Corps) announced a proposed rule that would expand their regulatory authority under the Clean Water Act (CWA). Specifically, the proposed rule makes changes to the definition of “waters of the U.S.” EPA and the Corps claim they are just clarifying their current jurisdiction, but, in fact, they are expanding their jurisdiction to include: • a broad definition of tributaries to traditional navigable waters, which includes seasonal and rain-dependent streams and most ditches; • all waters adjacent to traditional navigable waters, which includes adjacent streams, ditches and wetlands; and • isolated wetlands or “other waters” that have a “significant nexus” to the traditional navigable waters. The federal jurisdiction contemplated by the proposed rule goes far beyond what Congress intended with the CWA, and far beyond the limits on federal jurisdiction brought about by
U.S. Supreme Court case law. What does this mean for your farm in particular? Well, most farm ponds, ditches and rain-dependent streams are all covered under this proposed rule. Giving EPA and the Corps jurisdiction over these water and land features gives them the power to regulate or prohibit land uses and farming practices in, over or near them. This proposed rule would make it more difficult to farm or change a farming operation to remain competitive and profitable. The definition of “waters of the U.S.” is found throughout the CWA: Section 402 (National Pollutant Discharge Elimination System Permits), Section 404 (Dredge and Fill Permits), Water Quality Standards, Total Maximum Daily Loads and the list goes on. This expanded jurisdiction would allow EPA to overstep Illinois EPA in many more cases, and allow for citizen lawsuits that could create regulation and enforcement in cases where currently no such programming exists.
Jim Koeller kneels near the edge of a field ditch on his farm near New Canton. Farmers worry ditches like this could be federally regulated. (Photo courtesy of Pike and Scott County Farm Bureaus)
Illinois Farm Bureau policy process: ‘Truly, it works’ DAVID ERICKSON, CHAIRMAN, RESOLUTIONS COMMITTEE
At a recent county Farm Bureau policy meeting, I told members policy development for the Illinois Farm Bureau works for three simple reasons. First, any member can raise an issue of concern to his or her county Farm Bureau for consideration as a possible policy resolution. Nearly every year, a member from somewhere in the state has an idea or issue of personal importance that may affect many other members as well. The member brings that issue to his or her county Farm Bureau where it is dis-
Please see WOTUS, page 4
cussed and perhaps develops into a policy resolution for the IFB Resolutions Committee to consider. The members know that policy at the local and state level may also be considered at the national level if it is of national significance or importance. It works because individual members have a voice. Next, IFB policy development is known and regularly scheduled. Farm Bureau members know policy development is scheduled to take place at the same time each year using the same basic procedure. There is no mystery surrounding the process. Members and county Farm Bureaus know that it will happen, when it will happen and how they can be an active part of the process.
In addition, IFB leadership constantly educates elected state and national officials about our policy process. Those officials know that we develop policy positions with active engagement from our members. It works because it is a reliable process. Finally, Illinois Farm Bureau policy is respectfully regarded and held in high esteem. Voting delegates at the IFB Annual Meeting take the process of policy resolutions discussion very seriously. Delegates have the opportunity to discuss resolutions in great detail and work passionately to gain the support of fellow delegates for their specific policy resolution submittals. Once approved by the voting delegates, the Policy Resolutions Hand-
book is used to guide the legislative, regulatory and economic principles for our organization for the next year. Farm Bureau is well known in Springfield and Washington, D.C., for our well-defined policies and principled approach to advocacy. It works because our policies are highly regarded and well respected. We must continue to make policy development and review a cornerstone of the Illinois Farm Bureau. This important work helps to keep members engaged, issues reviewed and our efforts focused. Thank you to all county Farm Bureaus, county presidents, Resolutions Committee and members who have made policy development a priority. Truly, it works.
ARTICLES FOR THIS SUPPLEMENT WERE WRITTEN BY IFB STAFF: LAUREN LURKINS, KEVIN RUND AND DOUG YODER
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Issue: Cover crops
Should IFB policy address cover crop usage? FarmWeek • Page V-2 • Monday, August 4, 2014
It may seem like everywhere you turn, you are reading something about cover crops. While they do seem to be the best management practice (BMP) du jour, cover crops have been used by farmers for generations. Now, they are being touted for new benefits, including reductions in both nitrate and phosphorus losses as well as improvements in soil health. But cover crops, just like any agricultural BMP, are not a one-size-fits-all solution for every farm operation in Illinois. The benefits of cover crops depend on your individual farming practices, crop rotations, soil types, climate, and, of course, Mother Nature. The soon-to-be-released Illinois Nutrient Loss Reduction Strategy is expected to include cover crops as a recommended BMP, based on currently available peer-reviewed scientific literature. The Illinois Council on Best Management Practices (CBMP), which is a coalition of agribusiness and agricultural organizations, including IFB, currently has several programs focusing on the education and outreach to farmers regarding the use of cover crops. First, CBMP is currently engaged in a three-year Cover Crop Training Program that utilizes regional cover crop specialists to provide training, education and outreach to promote the use of cover crops for nutrient management in production agriculture. During the life of the program, CBMP will train three regional cover crop specialists, who will establish cover crop demonstration sites and work with agricultural retailers, local Soil and Water Conservation Districts and the Illinois Department of Agriculture to identify farmers statewide. Cover crop specialists will provide training sessions and work with farmers to encourage them to incorporate cover crops into their farming operations and to help them choose the best implementation strategy for their farm. CBMP partners with the agriculture departments at Illinois community colleges to serve as partners in providing training sites and trainers. Cooperation and communication among multiple participating community colleges will establish a network for agricultural education and outreach in Illinois, and expand the impact of the program. In addition, CBMP currently uses
cover crops and other BMPs in its Lake Springfield Watershed Project to measure stream quality, and work with agricultural retailers and farmers to adopt BMPs to ensure the nitrate levels in Lake Springfield remain consistently below the drinking water standard of 10 parts per million. The Illinois Nutrient Research and Education Council, on which IFB has a voting seat, is currently conducting research regarding “An Agronomic and Environmental Assessment of Cover Crops in Illinois” and “A Paired Cover Crop Study to Determine Impact of Cover Crops on Water Quality.” Results from research projects like these will be able to update the information currently included in the strategy document. They will also provide Illinois farmers with additional information on which to base their operating decisions. Farmers can use a variety of cover crops. Pictured right: soybeans after rye. Below: annual ryegrass after cornstalks.
Your turn
While IFB policy covers BMPs in general, it is silent on the issue of cover crops specifically. In considering such policy additions, please review the following questions:
• Are you using or interested in using cover crops on your farm? • What educational or other resources do you need to help you consider whether cover crops are appropriate for your farm? • What is IFB’s role in supporting education and information on the use of cover crops?
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Issue: Grain grading
Page V-3 • Monday, August 4, 2014 • FarmWeek
Grain companies lowering corn moisture threshold
An issue of recent concern in farm country is the decision by several grain companies to lower the threshold at which they require corn to be delivered without receiving a drying and shrinkage charge from 15 percent to 14.5 percent. Numerous farmers have contacted the Illinois Farm Bureau to inquire what can be done to prevent this. No law, statute or regulation requiring grain elevators to use a certain moisture threshold currently exists. In fact, moisture is not even a factor in the Grain Inspection, Packers and Stockyard Administration’s (GIPSA’s) Grading Requirements for Corn. GIPSA is the agency entitled by the USDA to develop and maintain the rules of the grain grading industry. Factors used to determine the grade of commercial dent corn are test weight, heat damage and total damage, and broken corn and foreign material. For example, to receive a No. 2 yellow corn designation, which the majority of commercial dent corn is purchased at, the representative sample must meet these specifications: • minimum test weight of 54 pounds; • maximum heat-damaged kernels of .2 percent; • maximum total damage of 5 percent; and maximum broken corn and foreign material (BCFM) of 3 percent. Even though moisture content is not a grading factor in commercial grain, it is very important in the ability to maintain adequate quality of stored grain and is thus an important factor for buyers of grain. Thus, acceptable moisture levels and moisture discount schedules can be a negotiable issue between buyer and seller. The rationale used by the grain companies recently lowering the acceptable moisture threshold is to match what they’re selling with what their foreign customers want to purchase. This would indicate that foreign buyers would prefer corn be dried down to 14.5 percent moisture before transporting it overseas.
Your turn
Questions to consider regarding corn moisture content issues:
• Should farmers demand a premium for delivering drier corn? • What is the justification for a change to a lower moisture level? • What impact will a lower moisture level for delivery have on your farming operation?
If this is indeed their preference, it is hard to argue with our need to give buyers what they want in order to maintain our grain export market share. However, this does not necessarily mean the additional cost burden of drying corn down to 14.5 percent must be borne by farmers. If U.S. grain companies wish to meet foreign buyer demands on moisture content they have several possible approaches to meet this demand:
The Resolutions Committee
• Negotiate a higher selling price with foreign buyers if they are requesting drier corn. • Offer farmers a premium for delivering corn that has been dried down to 14.5 percent. • Continue to buy corn based on 15 percent moisture and incur the extra drying themselves. • Adjust their moisture threshold requirements down to 14.5 percent, but simultaneously raise their corn bid to farmers as they are now seeking a premium product. • Adjust their moisture threshold requirements down to 14.5 percent. Farmers are very astute business operators. They certainly understand the need to meet foreign buyer’s demands and thus not lose export markets which are vital to our grain markets. Farmers also understand grain companies have options in how they arrive at the need to purchase drier corn. What bothers farmers is the fact that it appears the approach being taken is to ask farmers to bear the extra cost burden without an appropriate adjustment in price for delivering a higher value product. It appears the best approach to rectify this situation is for farmers to dialogue with their grain buyers to share their unhappiness and attempt to negotiate better terms. If unsuccessful, hopefully, options exist as to where farmers deliver their grain.
The Illinois Farm Bureau Resolutions Committee (RC) convenes each July to review new policy submittals from individual county Farm Bureaus, IFB’s Strength With Advisory Teams (SWAT) and other sources. After designating issues for further review, the RC seeks county Farm Bureau input before returning in November to finetune policy resoultions for IFB delegate consideration in December. National policies approved by delegates are considered for submission to the American Farm Bureau Federation for consideration by farmers nationwide. This year’s RC members, include: Action Team representative District 9: Joe Zumwalt, Hancock County presidents Steve Launius, Washington District 10: Wayne Brown, Scott District 1: Michele Aavang, McHenry Young Leader Committee representative District 11: Joel Reedy, Moultrie District 2: Ron Lawfer, JoDaviess Matt Rush, Wayne District 12: Dave Sadler, Vermilion District 3: Jeff Kirwan, Mercer IFB Board representatives District 13: Brad Daugherty, Clark David Serven, Knox District 4: Monty Whipple, LaSalle District 14: Kent Mellendorf, Effingham Wayne Anderson, Henry District 5: Wes Morris Jr., Kendall District 15: Dan Schetter, Jersey Jim Anderson, Williamson District 16: Glen Mueller, Monroe District 6: Keith Mussman, Kankakee David Erickson, RC Chairman District 7: Wayne Blunier, Woodford District 17: Leon McClerren, Franklin District 18: Rollo Burnett, Massac District 8: Bill Carlberg, Fulton
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Issue: Highway funding
Not enough money available to fix infrastructure FarmWeek • Page V-4 • Monday, August 4, 2014
The question of how best to fund highway infrastructure represents a key issue at local, state and national levels. At the state and federal levels (and in lessaffluent local districts), the primary funding source for roads is the motor fuel tax (MFT). The fixed per-gallon rate has not been increased since 1990 in Illinois and not since 1993 by Congress, leaving current revenues far short of funding needs. But for those two decades, politicians have been unwilling to make the tough choice to increase the MFT per-gallon rate. In addition to stagnate MFT rates, other factors have also reduced the effectiveness of the current funding system. The rising cost of construction drives down purchasing power of each dollar collected. And fewer dollars are collected because fewer gallons of fuel are being purchased due to improved fuel efficiency of the national fleet, a gradual shift to hybrid and electric vehicles, and leveling off of total miles driven nationwide. This has caused legislators to look at alternate sources of revenue. There are two types of revenue sources: fees paid based on use of the highways and sources unrelated to highway use. Among potential user fees being considered are: • MFT (increase). PRO: It has a relatively simple, incremental collection system already in place, and it’s sensitive to
WOTUS
the degree of highway use. CON: It does not collect from the growing fleet of hybrid and electric vehicles, and does not account for vehicle size or specific road use. • Mileage tax. PRO: Most accurately reflects highway use and can be applied to all vehicle types. Rate can vary by vehicle size. In its most sophisticated form, it could track which roads are
used allowing targeting of fund distributions. CON: Would require equipping both cars and fuel dispensers with communications equipment needed to read mileage or other technological updates. • Tolls. PRO: Accounts for specific highway used and degree of use. Easily collected incrementally with I-PASS technology. Variable by vehicle size, location and congestion. CON: Applicability is limited to high-volume, limited-access routes (i.e. interstates). Would require major investment in IPASS technology and supporting roadway infrastructure.
That’s not all! At the same time the agencies proposed the “waters of the U.S.” rule, they also unveiled an interpretive rule, which took effect immediately, and which grants farmers more than 50 exemptions for conservation practices. The Interpretive Rule has been publicized by EPA and the Corps as being a good thing for agriculture. The truth is, though, that the Interpretive Rule changes the game for agriculture. While these exemptions have been available to farmers for decades, in order for farmers to take advantage of the exemption under this new rule, they would have to follow Natural Resources Conservation Service (NRCS) practice standards. Further, the exemptions are not available to new or expanding continued from page 1
Typically users double pay — tolls and MFT. Among potential sources not related to highway use are: • General revenue. PRO: Has virtually unlimited options for raising revenue. Competition for funds demands prioritization of expenditures. CON: Not sensitive to highway use. Subject to annual fluctuations and competition for funding, making it less well-suited for multiyear infrastructure projects. • Bonds. PRO: Generally suitable for capital investments (not operating costs). Can be funded from a range of sources, including user fees. CON: Defeats the pay-as-you-go approach associated with user fees. Does not provide year-to-year continuity needed for consistency and long-range planning. • Property tax (local units only). PRO: Stable. Locally controlled. Generally derived from property served by the road. CON: Not directly associated with highway use. Can result in disproportionate contributions by taxpayers. Capacity limited by local affluence. • Other funds (transfers). PRO: Generally helpful in covering immediate shortfalls. CON: Diverts money collected for other dedicated purposes. Unsustainable. Decision makers face questions other than revenue on this topic as well, such as whether the federal government should continue its current role in col-
farms, and only apply to exempt farmers from having to obtain Section 404 Dredge and Fill permits from the Corps. What does this mean? NRCS voluntary conservation practices would now be mandatory or, if Section 404 Dredge and Fill permits are not obtained for such actions, individual farmers risk CWA enforcement action, citizen lawsuits and CWA penalties of $37,500 per day per discharge. IFB policy currently includes quite a bit regarding the Clean Water Act. And, it also states that “[w]e, in cooperation with American Farm Bureau Federation, should place greater emphasis on the regulatory process to better protect agriculture’s interest during rulemaking.” (Policy 86, Page 73, line 28).
Your turn
Questions to consider about highway funding:
• Should highway funding rely solely on user fees or incorporate funding from other sources? • How should hybrid and electric vehicles be made to contribute their fair share in user fees? • How should Illinois adjust the emphasis placed on MFT, registration fees and other forms of highway user fees? • What, if any, adjustment should be made in the allocation of state-collected user fees between the state and local governments? • Should the federal government maintain its role in funding state and local highway projects or should it remove itself from that role? lecting and distributing highway revenue along with the regulatory strings it attaches. States would often prefer greater flexibility, but the nationwide consistency provided by a federal program has significant benefits. Local road jurisdictions in Illinois rely heavily on state-collected user fees (MFT). At issue are the state/local split and the split among local units (currently approximately 45 percent state/55 percent local). Adjustments to state program grants to local units might also be considered, i.e. township bridge assistance, railroad crossings, needy townships and 80,000-pound roads.
Your turn
Consider the following:
• Do you as a farm operator understand the ramifications of the WOTUS rule on your operation? • How will the implementation of EPA’s WOTUS rule impact your farming operation? • How will the implementation of EPA’s WOTUS rule impact agricultural enterprises outside of production agriculture? • How do we engage parties that may be impacted by the WOTUS rule? • How do you feel about appointed individuals making interpretations and changes to current regulations?