Farmweek bottom line august 4, 2014

In March, the U.S. EnvironmentalProtection Agency (EPA) and theUnited States Army Corps of Engi-neers (Corps) announced a proposedrule that would expand their regulatoryauthority under the Clean Water Act(CWA). Specifically, the proposed rulemakes 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 ju-risdiction to include: • a broad definition of tributaries to

traditional navigable waters, which in-cludes seasonal and rain-dependentstreams and most ditches;• all waters adjacent to traditional

navigable waters, which includes adja-cent streams, ditches and wetlands; and• isolated wetlands or “other wa-

ters” that have a “significant nexus” tothe traditional navigable waters. The federal jurisdiction contem-

plated by the proposed rule goes farbeyond what Congress intended withthe CWA, and far beyond the limits onfederal 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 areall covered under this proposed rule.Giving EPA and the Corps jurisdictionover these water and land features givesthem the power to regulate or prohibitland uses and farming practices in, overor near them. This proposed rulewould make it more difficult to farm orchange a farming operation to remaincompetitive and profitable.The definition of “waters of the

U.S.” is found throughout the CWA:Section 402 (National Pollutant Dis-charge Elimination System Permits),Section 404 (Dredge and Fill Permits),Water Quality Standards, Total Maxi-mum Daily Loads and the list goes on.This expanded jurisdiction would allowEPA to overstep Illinois EPA in manymore cases, and allow for citizen law-suits that could create regulation andenforcement in cases where currentlyno such programming exists.

BOTTOM LINE Issues impacting your operationThe 2014 Illinois Farm Bureau Policy Development Supplement

ARTICLES FOR THIS SUPPLEMENT WERE WRITTEN BY IFB STAFF: LAUREN LURKINS, KEVIN RUND AND DOUG YODER

DAVID ERICKSON, CHAIRMAN,RESOLUTIONS COMMITTEEAt a recent county Farm Bureau

policy meeting, I told members policydevelopment for theIllinois Farm Bureauworks for three sim-ple reasons.First, any member

can raise an issue ofconcern to his or hercounty Farm Bureaufor consideration as apossible policy resolu-tion. Nearly every year, a member fromsomewhere in the state has an idea orissue of personal importance that mayaffect many other members as well.The member brings that issue to his orher county Farm Bureau where it is dis-

cussed and perhaps develops into apolicy resolution for the IFB Resolu-tions Committee to consider. The members know that policy at

the local and state level may also beconsidered at the national level if it isof national significance or importance.It works because individual membershave a voice.Next, IFB policy development is

known and regularly scheduled. FarmBureau members know policy develop-ment is scheduled to take place at thesame time each year using the samebasic procedure. There is no mysterysurrounding the process. Members andcounty Farm Bureaus know that it willhappen, when it will happen and howthey can be an active part of theprocess.

In addition, IFB leadership con-stantly educates elected state and na-tional officials about our policyprocess. Those officials know that wedevelop policy positions with activeengagement from our members. Itworks because it is a reliable process.Finally, Illinois Farm Bureau policy

is respectfully regarded and held inhigh esteem. Voting delegates at theIFB Annual Meeting take the processof policy resolutions discussion veryseriously. Delegates have the opportunity to

discuss resolutions in great detail andwork passionately to gain the supportof fellow delegates for their specificpolicy resolution submittals.Once approved by the voting dele-gates, the Policy Resolutions Hand-

book is used to guide the legislative,regulatory and economic principlesfor our organization for the next year. Farm Bureau is well known in

Springfield and Washington, D.C., forour well-defined policies and princi-pled approach to advocacy. It worksbecause our policies are highly re-garded and well respected.We must continue to make policy

development and review a corner-stone of the Illinois Farm Bureau.This important work helps to keepmembers engaged, issues reviewedand our efforts focused. Thank you to all county Farm Bu-

reaus, county presidents, ResolutionsCommittee and members who havemade policy development a priority.Truly, it works.

Illinois Farm Bureau policy process: ‘Truly, it works’

Proposed rule makes farming difficultIssue: ‘Waters of the U.S.’

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 Pikeand Scott County Farm Bureaus)Please see WOTUS, page 4

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It may seem like everywhere you turn,you are reading something about covercrops. While they do seem to be the best

management practice (BMP) du jour, covercrops have been used by farmers for gen-erations. Now, they are being touted fornew benefits, including reductions in bothnitrate and phosphorus losses as well asimprovements in soil health. But cover crops, just like any agricul-

tural BMP, are not a one-size-fits-all solu-tion for every farm operation in Illinois.The benefits of cover crops depend onyour individual farming practices, crop ro-tations, soil types, climate, and, of course,Mother Nature. The soon-to-be-released Illinois Nutri-

ent Loss Reduction Strategy is expected toinclude cover crops as a recommendedBMP, based on currently available peer-re-viewed scientific literature.The Illinois Council on Best Manage-

ment Practices (CBMP), which is a coali-tion of agribusiness and agriculturalorganizations, including IFB, currently hasseveral programs focusing on the educa-tion and outreach to farmers regarding theuse of cover crops.First, CBMP is currently engaged in a

three-year Cover Crop Training Programthat utilizes regional cover crop specialiststo provide training, education and out-reach to promote the use of cover cropsfor nutrient management in productionagriculture. During the life of the program, CBMP

will train three regional cover crop special-ists, who will establish cover crop demon-stration sites and work with agriculturalretailers, local Soil and Water ConservationDistricts and the Illinois Department ofAgriculture to identify farmers statewide. Cover crop specialists will provide

training sessions and work with farmers toencourage them to incorporate covercrops into their farming operations and tohelp them choose the best implementationstrategy for their farm. CBMP partners with the agriculture de-

partments at Illinois community collegesto serve as partners in providing trainingsites and trainers.

Cooperation and communicationamong multiple participating communitycolleges will establish a network for agri-cultural education and outreach in Illinois,and expand the impact of the program.In addition, CBMP currently uses

cover crops and other BMPs in its LakeSpringfield Watershed Project to measurestream quality, and work with agriculturalretailers and farmers to adopt BMPs toensure the nitrate levels in Lake Spring-field remain consistently below the drink-ing water standard of 10 parts permillion.The Illinois Nutrient Research and

Education Council, on which IFB has avoting seat, is currently conducting re-search regarding “An Agronomic and En-vironmental Assessment of Cover Cropsin Illinois” and “A Paired Cover CropStudy to Determine Impact of CoverCrops on Water Quality.” Results from research projects like

these will be able to update the informa-tion currently included in the strategydocument. They will also provide Illinois farmers

with additional information on which tobase their operating decisions.

Issue: Cover crops

Farmers can use a variety of cover crops.Pictured right: soybeans after rye. Below:annual ryegrass after cornstalks.

Your turnWhile IFB policy covers BMPs in general, it is silent on the issue of cover crops specifi-cally. 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 appro-priate for your farm?• What is IFB’s role in supporting education and information on the use of cover crops?

Should IFB policy address cover crop usage?

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An issue of recent concern in farm country is thedecision by several grain companies to lower thethreshold at which they require corn to be deliveredwithout receiving a drying and shrinkage chargefrom 15 percent to 14.5 percent. Numerous farmershave contacted the Illinois Farm Bureau to inquirewhat can be done to prevent this. No law, statute or regulation requiring grain eleva-

tors to use a certain moisture threshold currently ex-ists. In fact, moisture is not even a factor in theGrain Inspection, Packers and Stockyard Adminis-tration’s (GIPSA’s) Grading Requirements for Corn. GIPSA is the agency entitled by the USDA to de-velop and maintain the rules of the grain grading in-dustry. Factors used to determine the grade of commer-

cial dent corn are test weight, heat damage and totaldamage, and broken corn and foreign material. For example, to receive a No. 2 yellow corn desig-

nation, which the majority of commercial dent cornis purchased at, the representative sample must meetthese 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 theability to maintain adequate quality of stored grainand is thus an important factor for buyers of grain.Thus, acceptable moisture levels and moisture dis-count schedules can be a negotiable issue betweenbuyer and seller. The rationale used by the grain companies re-

cently lowering the acceptable moisture threshold isto match what they’re selling with what their foreigncustomers want to purchase. This would indicatethat foreign buyers would prefer corn be dried downto 14.5 percent moisture before transporting it over-seas.

If this is indeed their preference, it is hard toargue with our need to give buyers what they want inorder to maintain our grain export market share.However, this does not necessarily mean the addi-tional cost burden of drying corn down to 14.5 per-cent must be borne by farmers.If U.S. grain companies wish to meet foreign

buyer demands on moisture content they have sev-eral possible approaches to meet this demand:

• Negotiate a higher selling price with foreignbuyers 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 theircorn bid to farmers as they are now seeking a pre-mium 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’sdemands and thus not lose export markets which arevital to our grain markets. Farmers also understand grain companies have

options in how they arrive at the need to purchasedrier corn.What bothers farmers is the fact that it appears

the approach being taken is to ask farmers to bearthe extra cost burden without an appropriate adjust-ment in price for delivering a higher value product. It appears the best approach to rectify this situa-

tion is for farmers to dialogue with their grain buyersto share their unhappiness and attempt to negotiatebetter terms. If unsuccessful, hopefully, options exist as to

where farmers deliver their grain.

Issue: Grain gradingGrain companies lowering corn moisture threshold

Your turnQuestions to consider regarding cornmoisture content issues:  • Should farmers demand a premium for de-livering drier corn?• What is the justification for a change to alower moisture level?• What impact will a lower moisture level fordelivery have on your farming operation?

The Illinois Farm Bureau Resolutions Committee (RC) convenes each July to review new policy submittals from individual county Farm Bureaus, IFB’sStrength 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.

The Resolutions Committee

This year’s RC members, include:County presidentsDistrict 1: Michele Aavang, McHenryDistrict 2: Ron Lawfer, JoDaviessDistrict 3: Jeff Kirwan, MercerDistrict 4: Monty Whipple, LaSalleDistrict 5: Wes Morris Jr., KendallDistrict 6: Keith Mussman, KankakeeDistrict 7: Wayne Blunier, WoodfordDistrict 8: Bill Carlberg, Fulton

District 9: Joe Zumwalt, Hancock District 10: Wayne Brown, Scott District 11: Joel Reedy, Moultrie District 12: Dave Sadler, Vermilion District 13: Brad Daugherty, Clark District 14: Kent Mellendorf, Effingham District 15: Dan Schetter, Jersey District 16: Glen Mueller, MonroeDistrict 17: Leon McClerren, FranklinDistrict 18: Rollo Burnett, Massac

Action Team representativeSteve Launius, Washington

Young Leader Committee representativeMatt Rush, Wayne

IFB Board representativesDavid Serven, Knox Wayne Anderson, HenryJim Anderson, WilliamsonDavid Erickson, RC Chairman

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WOTUScontinued from page 1

That’s not all! At the same time the agenciesproposed the “waters of the U.S.” rule, they alsounveiled an interpretive rule, which took effectimmediately, and which grants farmers more than50 exemptions for conservation practices. The In-terpretive Rule has been publicized by EPA andthe Corps as being a good thing for agriculture.The truth is, though, that the Interpretive Rule

changes the game for agriculture. While these ex-emptions have been available to farmers fordecades, in order for farmers to take advantage ofthe exemption under this new rule, they wouldhave to follow Natural Resources ConservationService (NRCS) practice standards. Further, theexemptions are not available to new or expanding

farms, and only apply to exempt farmers fromhaving to obtain Section 404 Dredge and Fill per-mits from the Corps.What does this mean? NRCS voluntary con-

servation practices would now be mandatory or,if Section 404 Dredge and Fill permits are notobtained for such actions, individual farmers riskCWA enforcement action, citizen lawsuits andCWA penalties of $37,500 per day per discharge. IFB policy currently includes quite a bit re-

garding the Clean Water Act. And, it also statesthat “[w]e, in cooperation with American FarmBureau Federation, should place greater emphasison the regulatory process to better protect agri-culture’s interest during rulemaking.” (Policy 86,Page 73, line 28).

Your turnConsider the following:• Do you as a farm operator understand the ramifica-tions of the WOTUS rule on your operation?• How will the implementation of EPA’s WOTUSrule impact your farming operation?• How will the implementation of EPA’s WOTUSrule impact agricultural enterprises outside of produc-tion agriculture?• How do we engage parties that may be impacted bythe WOTUS rule?• How do you feel about appointed individuals mak-ing interpretations and changes to current regulations?

The question of how best to fundhighway infrastructure represents a keyissue at local, state and national levels. Atthe state and federal levels (and in less-affluent local districts), the primaryfunding source for roads is the motorfuel tax (MFT). The fixed per-gallon rate has not

been increased since 1990 in Illinois andnot since 1993 by Congress, leaving cur-rent revenues far short offunding needs. But for thosetwo decades, politicians havebeen unwilling to make thetough choice to increase theMFT per-gallon rate.In addition to stagnate

MFT rates, other factorshave also reduced the effec-tiveness of the current fund-ing system. The rising cost ofconstruction drives downpurchasing power of eachdollar collected. And fewerdollars are collected becausefewer gallons of fuel arebeing purchased due to im-proved fuel efficiency of the nationalfleet, a gradual shift to hybrid and elec-tric vehicles, and leveling off of totalmiles driven nationwide. This has causedlegislators to look at alternate sources ofrevenue.There are two types of revenue

sources: fees paid based on use of thehighways and sources unrelated to high-way use. Among potential user fees being con-

sidered are:• MFT (increase). PRO: It has a rela-

tively simple, incremental collection sys-tem already in place, and it’s sensitive to

the degree of highway use. CON: Itdoes not collect from the growing fleetof hybrid and electric vehicles, and doesnot account for vehicle size or specificroad use.• Mileage tax. PRO: Most accurately

reflects highway use and can be appliedto all vehicle types. Rate can vary by ve-hicle size. In its most sophisticatedform, it could track which roads are

used allowing targeting of fund distribu-tions. CON: Would require equippingboth cars and fuel dispensers with com-munications equipment needed to readmileage or other technological updates.• Tolls. PRO: Accounts for specific

highway used and degree of use. Easilycollected incrementally with I-PASStechnology. Variable by vehicle size, lo-cation and congestion. CON: Applica-bility is limited to high-volume,limited-access routes (i.e. interstates).Would require major investment in I-PASS technology and supporting road-way infrastructure.

Typically users double pay — tollsand MFT.Among potential sources not related

to highway use are:• General revenue. PRO: Has virtu-

ally unlimited options for raising rev-enue. Competition for funds demandsprioritization of expenditures. CON:Not sensitive to highway use. Subject toannual fluctuations and competition for

funding, making it lesswell-suited for multiyearinfrastructure projects.• Bonds. PRO: Gener-

ally suitable for capital in-vestments (not operatingcosts). Can be fundedfrom a range of sources,including user fees. CON:Defeats the pay-as-you-goapproach associated withuser fees. Does not pro-vide year-to-year continu-ity needed for consistencyand long-range planning.• Property tax (local

units only). PRO: Stable.Locally controlled. Generally derivedfrom property served by the road.CON: Not directly associated with high-way use. Can result in disproportionatecontributions by taxpayers. Capacity lim-ited by local affluence.• Other funds (transfers). PRO: Gen-

erally helpful in covering immediateshortfalls. CON: Diverts money col-lected for other dedicated purposes. Un-sustainable.Decision makers face questions other

than revenue on this topic as well, suchas whether the federal governmentshould continue its current role in col-

lecting and distributing highway revenuealong with the regulatory strings it at-taches. States would often prefer greaterflexibility, but the nationwide consis-tency provided by a federal program hassignificant benefits.Local road jurisdictions in Illinois rely

heavily on state-collected user fees(MFT). At issue are the state/local splitand the split among local units (cur-rently approximately 45 percent state/55percent local). Adjustments to state pro-gram grants to local units might also beconsidered, i.e. township bridge assis-tance, railroad crossings, needy town-ships and 80,000-pound roads.

Issue: Highway fundingNot enough money available to fix infrastructure

Your turnQuestions to considerabout highway funding:• Should highway funding relysolely on user fees or incorporatefunding from other sources?• How should hybrid and electricvehicles be made to contributetheir fair share in user fees?• How should Illinois adjust theemphasis placed on MFT, regis-tration fees and other forms ofhighway user fees?• What, if any, adjustment shouldbe made in the allocation ofstate-collected user fees betweenthe state and local governments?• Should the federal governmentmaintain its role in funding stateand local highway projects orshould it remove itself from thatrole?

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