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Monticello IL | Disaster/biodiesel bill passes Senate
Mar 11, 2010 1:29 PM, By David Bennett, Farm Press Editorial Staff
On Wednesday (March 10), the Senate passed the “American Workers, State, and Business Relief Act of 2010.” Besides providing $1.5 billion in disaster funds for agriculture, the bill would reinstate vital tax credits for the biodiesel industry that expired last December. The bill must still be reconciled with similar House legislation.
“This past week we’ve had a lot of discussions with people from other regions of the country asking why the South needs a disaster program on top of the ones we have under permanent legislation,” said Richard Bell, Arkansas Secretary of Agriculture, during a conference call set up by Arkansas Sen. Blanche Lincoln. “The answer is rather simple: because we’re different. The legislation that’s just passed will fill the gaps in the 2008 farm bill and will be a big plus for us.”
Few outside agriculture realize how difficult 2009 was for Mid-South growers, said Bell. “The crop started out with too much rain in the spring. We ended up with terrible rains again in the fall. The University of Arkansas Division of Agriculture estimates that (state) losses are somewhere around $600 million – and that includes the value-added part of it and close to 4,000 jobs lost.”
Farmers are now “one step closer to receiving relief they desperately need,” said Sen. Lincoln, chairman of the Senate Agriculture Committee. “This will provide an estimated $1 billion in supplemental payments to producers who suffered crop losses. It also provides $300 million in assistance to specialty crop producers, $75 million in emergency loans to poultry producers, $50 million in assistance to livestock producers, $20 million for aquaculture assistance and $42 million for first handlers of cottonseed.”
How quickly might farmers receive those funds?
“We want to make sure (the bill passes) as quickly as possible,” said Lincoln. “We’ve made known to the House how important that is. There are a lot of members there who understand people have been waiting on this. Most of the tax extenders expired last December, some last June. So there’s an (urgency) to it.
“I can’t predict when the House will send it back to us. My hope is it will be next week (the week of March 15).”
Speaking on the biodiesel tax initiatives, Lincoln said “there’s no doubt that in order to grow jobs and the economy there must be predictability in the tax code. These are new industries finding their footing … and they’ve got to be able to go to capital markets for the resources they need. They can’t do that without more predictability in the economy and tax code.”
Like other biodiesel manufacturers, Delta American Fuel in Helena, Ark., stands to benefit from the bill’s tax credit. Without it, some 40 jobs were in jeopardy, said Bernie Crowley, Jr., general manager/owner of Delta American Fuel who now plans to hire 30 or 35 more people.
“The biodiesel tax credit extended today is what formed the biodiesel industry,” said Crowley. “Without it, the industry would have never existed.”
Asked about the demand for biodiesel since the tax incentive lapsed last December, Crowley said, “It’s disappeared. It went from a demand that wasn’t incredibly healthy to one that dried up. Without the biofuel tax credit it would continue to dry up. … There are no sales in the industry and we have over 500,000 gallons of product sitting in tanks we’ve been unable to sell.”
The bill also includes an extension of the new markets tax credit “which provides capital to spur economic development in low-income areas,” said Lincoln. The credit “does a tremendous job in leveraging dollars – private dollars with public dollars. The partnerships are amazing in terms of the resources we see pumping into our communities through the initiative.”
The new market tax credit program is “used to encourage private capital investment in business and projects in low-income and rural communities,” said Sam Walls, III, senior vice president of Arkansas Capital Corp. “I think this is a great program and represents the best in public/private partnerships. It isn’t a grant program. It’s used to help bring private capital to areas that, even in the best of economic conditions, struggle to attract investment.
Typically, the projects are “catalytic” in nature, said Walls. “Investing in such projects tends to bring in additional investment. A study from several years ago showed that for every dollar of federal money used in the program, about $14 of investment is attracted.”
Also included in the bill: a one-year extension of the tax credit that provides short-line and regional railroads. “This is a 50 percent tax credit for expenditures for maintaining railroad tracks they own or lease,” said Lincoln. “Our short-line rail lines in Arkansas are absolutely essential.”
Another provision in the legislation is aimed to ensure that those who sell timber “are taxed at the capital gains rate, which is lower than the current rate for some.”
The bipartisan legislation was passed in just three months. Usually, “agriculture disaster (legislation) takes anywhere from three to four years to pass,” said Lincoln. “I knew our farmers didn’t have that kind of time. That’s one of the reasons I’ve been so busy (on Capitol Hill) working with colleagues and pestering just about any member of the Senate I could to ensure this (passed) and get it moved to the House. I’ll now continue that 24/7 attitude to make sure members of the House understand how important it is.”
The legislation “is very much needed,” said Mike Booker, a Monroe County farmer. Following last year’s very wet, trying early season with late-planted and re-planted crops, “we managed to put a nice crop together. Then, towards the fall, we had extreme amounts of rain again – so much that it flooded all the river bottoms. Every creek in Monroe County swelled and took hundreds of acres. Each of my neighbors lost 20 to 25 percent of their soybeans. Those closer to the rivers lost 50 to 75 percent of their soybeans.”
Farmers, said Booker, are “struggling to put things together, to get a crop loan, to get back in the field and try again. Some aren’t going to make it. It’s a really bad time and this (legislation) is really needed.”
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diaster ad and Biodiesel bill passes senate
