WAWG
Handicapping association’s 2019 federal, state legislative agenda
It may be a new year, but many of the issues on the Washington Association of Wheat Growers’ (WAWG) legislative agenda aren’t.
The WAWG leadership team is gearing up for what looks to be a busy legislative season. The midterm elections saw a large number of freshman lawmakers elected to the state legislature, many of whom may be unfamiliar with agricultural issues. During the association’s annual Olympia Days trip—Jan. 29-31—wheat growers will be meeting with as many of them as possible to educate them about the wheat industry, talk about the issues Washington agriculture is facing and to answer their questions.
The 2019 Washington State Legislative Session is a budget session, scheduled for 105 days. Although the legislature has made significant inroads in meeting their education funding requirements as set forth in the 2012 McCleary court case, there are still some funding issues regarding teacher contracts that will need to be resolved. In addition, a recent court case ruled that the state will need to modify state-owned culverts in order to help migrating salmon. That effort is estimated to cost in the hundreds of millions. There are also mental health funding issues the state will have to address. These funding issues could mean that ag tax preferences will come under scrutiny as legislators begin working on a budget.
WAWG will also be looking to address many issues at the federal level, working in tandem with the National Association of Wheat Growers. The passage of the 2018 Farm Bill in December was a cause for celebration throughout the agricultural world, but there is still work to do educating farmers on changes to commodity programs and making sure crop insurance remains viable for farmers.
The lack of trade agreements with some of our major customers, such as Japan, as well as retaliatory trade tariffs, continue to be a major source of concern in wheat country. WAWG’s leadership team will be traveling to Washington, D.C., in February for NAWG’s annual winter conference, where they will take part in committee meetings and will meet with our federal delegation. A few weeks later, they’ll be headed to Florida to take part in NAWG’s annual meeting at Commodity Classic to discuss policy and plan for the year ahead.
“While we applaud the swift action taken by Congress to pass the farm bill, there remains a lot of uncertainty in farm country,” said Michelle Hennings, WAWG’s executive director. “We are still dealing with low commodity prices. We are still waiting for the government to resolve the various trade issues impacting our markets, and we are still fighting to protect our farmers from burdensome regulations, such as a carbon tax or unnecessarily restrictive pesticide application requirements.”
Here’s a closer look at some of the state and federal issues WAWG will be dealing with in the coming months.
Protecting the lower Snake River dams. In March 2018, Washington Gov. Jay Inslee signed an executive order establishing a taskforce to develop recommendations for orca recovery and future sustainability. Those final recommendations were released in November 2018 and included a recommendation to establish a stakeholder process to discuss potential breaching or removal of the lower Snake River dams to increase salmon stocks.
In December, Gov. Inslee’s proposed $1.1 billion budget includes $750,000 for the Southern Resident task force to establish a stakeholder process to discuss the associated economic and social impacts—as well as mitigation costs—of the potential breaching or removal of the lower Snake River dams. WAWG is opposed to the removal of the dams, as they are a vital part of the transportation of goods up and down the Columbia-Snake River System and will be actively involved in any discussions involving breaching dams to protect the orcas. WAWG will also be educating policymakers about the importance of the dams to agriculture and the economy. Approximately 60 percent of Washington wheat moves down the river system to Portland. The river system provides one of the most efficient and cleanest forms of transportation available to inland Pacific Northwest farmers.
At a U.S. House Committee on Natural Resources oversight hearing on the dams in September, WAWG Past President Marci Green testified on the importance of the lower Snake River dams, saying, “Without a navigable river system, barging would not be an option. Farmers would have to substitute rail transportation or trucks to get their wheat to port, which would be more expensive and less efficient. Having three different transportation options also keeps transportation costs more competitive and reasonable…The price farmers ultimately pocket after factoring in all their expenses makes the ultimate difference whether they can stay in business.”
Climate policies. In the recent midterm elections, Washington voters struck down Initiative 1631, a carbon fee that would have charged large carbon emitters a pollution fee of $15 per metric ton of carbon beginning in 2020. WAWG was opposed to the fee, believing it would raise fuel and fertilizer costs for growers. This is the second time voters have rejected any sort of tax or fee on carbon emissions. While Gov. Inslee has stated he won’t attempt to directly tax carbon emissions during this legislative session, he has proposed a number of climate change policies that skirt around the issue, including phasing out coal power and fossil fuels in Washington state, making the state’s power grid more energy efficient and promoting electrical vehicles.
With commodity prices low and input costs creeping higher, farmers are already struggling to stay in business. Any sort of carbon emission fee could increase farmers’ fertilizer and fuel costs, which could have disastrous results on already thin margins. Farmers work hard to limit erosion of the soil—both by water and by air—and strive to keep their carbon footprint as small as possible. WAWG believes agriculture sequesters more carbon than the industry releases, and any sort of tax on carbon emissions should take that fact into account. The agricultural industry will be closely monitoring the 2019 Legislative Session for any renewed attempts by lawmakers to impose any sort of tax on carbon emissions.
Pesticide application regulations. In the 2018 Washington State Legislative Session, a bill was introduced that would have required four days’ advance notification prior to any pesticide application, as well as onerous reporting requirements. That bill was revised, instead establishing a pesticide application safety workgroup to study the issue and develop recommendations for improving the safety of pesticide applications. The workgroup had not released its report as of press time, but it is rumored it will contain recommendations to expand applicator training and establish a new pesticide application safety panel to recommend policy options and investigate exposure cases.
“We believe the vast majority of pesticide applications are done in a safe manner. We are opposed to any regulations that put additional, onerous notification and reporting burdens on farmers who rely on these chemicals to combat pest and diseases that could destroy a crop,” said Hennings. “We hope legislators see the value in providing funding for additional applicator training as we believe that is the best, most cost-effective way to reduce the already small number of pesticide drift incidents in agriculture.”
Trade tariffs. The U.S. agricultural industry continues to reel under retaliatory trade tariffs, especially in regards to trade with China, which was the fifth-largest importer of Washington wheat in 2017. So far this marketing year, China hasn’t purchased any soft white wheat from the U.S. compared to approximately 275,000 metric tons purchased last year. While there is some progress being made between the U.S. and China, WAWG urges the Trump Administration to resolve the issue as soon as possible.
Trade agreements. When the U.S. pulled out of the Trans-Pacific Partnership agreement, the 11 remaining countries continued moving forward with the trade pact. This month, the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) goes into effect, resulting in reduced import tariffs for our competitor’s wheat, especially in one of the Pacific Northwest wheat industry’s most important trading partners, Japan. Under the terms of the CPTPP, Japanese flour millers will eventually pay $85 per metric ton of wheat for Australian and Canadian wheat compared to $150 per metric ton for U.S. wheat. This situation could eventually cost the U.S. wheat industry $500 million per year as these markets could stop buying our wheat. Recent news that the Trump Administration and the Japanese government are taking formal steps towards trade negotiations was welcomed in the wheat world.
Another important trade agreement that the wheat industry is closely monitoring is the United States-Mexico-Canada Agreement (USMCA), which replaces the North American Free Trade Agreement. While the three countries have officially signed the USMCA, it must still be ratified by Congress.
“With more than 90 percent of our wheat being exported, having favorable trade agreements in place is vital in protecting our markets,” said Jeffrey Shawver, WAWG president. “We have spent many years and millions of dollars to establish these markets, and if these countries turn to other suppliers, it could be very difficult for us to regain their business.”