Issue Briefs

Indiana Soybean Alliance is dedicated to sharing the most relevant issues with our farmers. Click below to find out more detail about these specific issues.

Biofuels
Farm Bill
Livestock
Right to Farm
Right to Farm — Biotechnology
Trade
Transportation

Biofuels

Biodiesel

Biodiesel is byproduct of soybean meal made from the separated oil after soybeans are crushed. Indiana is home to the world’s largest integrated soybean biodiesel plant located in Claypool, Indiana, at the Louis Dreyfus facility, which produces as much as 88 million gallons of biodiesel each year.

Tax Incentive

The biodiesel tax incentive has encouraged significant investment to expand the domestic biodiesel industry and help it become price competitive with petroleum diesel. Extension of the tax incentive is critical to the industry’s existence and growth. At this stage, biodiesel requires the tax incentive to be cost competitive with the more mature and entrenched petroleum industry. Biodiesel is the only advanced biofuel that is currently commercially available in the U.S. and it provides significant economic, energy security, environmental and health benefits. The tax credit expired on December 31, 2011.

An economic impact study conducted for the industry found that the expiration of the tax credit and the accompanying 42 percent drop in production for 2010 resulted in the loss of nearly 8,900 jobs, a reduction in real GDP of $879 million, and a drop in household income of $485 million.

The study estimated that the industry supported more than 31,000 jobs in 2011, generated income of nearly $1.7 billion, and created more than $3 billion in GDP. Under projected expansion by 2015, that economic impact would grow even further to supporting more than 74,000 jobs, $4 billion in income, and some $7.3 billion in GDP.

Rep. Aaron Schock (R-IL) and Rep. Collin Peterson (D-MN) have introduced H.R. 2238 in the House and Sen. Maria Cantwell (D-WA) and Sen. Chuck Grassley (R-IA) have introduced S. 1277 in the Senate. Co-sponsorship and support for these bills is important to ensure that biodiesel is in position to be included if there is a tax extenders package in 2011.

The legislation also includes a restructuring of the tax credit from a blender’s credit to a production tax credit. This change will further support domestic biodiesel production, improve administration of the incentive, eliminate potential abuses and improve tax compliance.

Farm Bill

As the federal budget continues to rack up record deficits, commodity organizations understand the need for effective and efficient farm programs to help farmers manage risk and cost taxpayers less money. Both the Indiana Soybean Alliance and Indiana Corn Growers Association have long supported proposals which combine crop insurance and USDA programs to help growers in years where prices and/or yields are reduced. For growers, especially young farmers, managing the potential loss of revenue is vital. Revenue programs are not designed to replace crop insurance nor do they guarantee profit for a farmer; instead, they are a means to manage risks not covered by current crop insurance programs.

Senate Version Summary

In the United States, some 16 million jobs depend on the strength and continued success of American agriculture. Our farmers grow the safest and most abundant supply of food, fiber and energy in the world. Innovations in agriculture allow families to put healthy, nutritious food on their tables at a lower cost than in most other countries. The Agriculture Reform, Food and Jobs Act reforms, eliminates and streamlines numerous programs, saving taxpayers $23 billion. It does this while strengthening the tools available to producers to help manage risks and conserve natural resources.

Farmers face unique risks unlike those in other professions. Weather and market conditions outside a producer’s control can have a devastating effect on producers, especially family farms. This bill ends direct payments, strengthens crop insurance, and encourages an innovative risk management approach that only provides assistance to producers when their businesses are threatened by risks outside their control.

Livestock

Animal Agriculture

Animal agriculture is a necessary and important part of our lives. Livestock and poultry farmers provide food, as well as help support our communities by generating tax revenue, supporting local business through purchasing fuel and equipment, create jobs, and consume local products, like grains and oilseeds. The corn, soybean and livestock industries are brought together on multiple fronts and normally share the same goals.

Environmental Issues

Not only are corn and soybean meal used as abundant livestock feed sources, the crop and livestock industries have worked together on a number of regulatory issues. Many of the concerns local citizens have about livestock, especially large livestock operations, often referred to as Confined Feeding Operations (CFO) or Confined Animal Feeding Operations (CAFO) revolve around manure. A small minority of local citizens are concerned the manure will spill out of large lagoons or pits or even run off fields when the farmers apply the manure as nutrients to the crop fields. Additionally, local citizens worry about the smell of the operation or other nuisances derived from livestock barns.

As a result, joint interests include topics related to the Clean Air and Clean Water Acts. Areas of close cooperation include dust particulate matter, odor issues, the National Pollutant Discharge Elimination System (NPDES) and Total Maximum Daily Loads (TMDL) of the Clean Water Act. Indiana Soybean Alliance has worked for several years with professors at Purdue University on odor-related issues to provide livestock farmers with tools which help place barns and apply manure with the minimum possible odor burden on the rural neighbors. This information and background can be found at: https://engineering.purdue.edu/~odor/setback.htm

Animal Welfare

Farmers and ranchers know the evolving political landscape on the national, state and local levels affect both corn and livestock industries. Working together on animal welfare, confined animal feeding operations and other common interests has proven very beneficial. ISA and ICMC also collaborate with state livestock groups on projects to promote the beef, dairy, pork, poultry and egg industries within Indiana.

Trade

When soybeans are sold to livestock producers in Indiana to feed livestock and poultry, which are eventually exported, more value is added to the soybeans through the export of the meat and poultry products than direct export of soybeans. Indiana Soybean Alliance is a member of U.S. Meat Export Federation and USA Poultry and Egg Export Council.

Through these organizations, corn and soybean farmers fund programs to help develop new markets or expand current markets for Indiana meat and poultry products. Indiana ranks 8th in the country in exports of livestock animals and red meat with $377 million in exports each year, while poultry and poultry products such as eggs rank 6th in the country with a value of $265 million.

Business and Production Education

ISA and ICMC Livestock Initiatives include funding research projects at Purdue University that address issues directly affecting livestock farmers. Both organizations fund research and educational programs with Purdue University and other partners that include studies:

• Looking at distillers grains in diets for layers, specifically higher inclusion rates focused on egg quality.
• Online tutorials that focus on helping Indiana farmers and associated businesses prepare for a new fertilizer and manure applicator rule in the state. These tutorials also provided livestock producers with information on new CAFO and Confined Feeding Operations (CFO) regulations in the state.

Both corn and soybean farmers want to work to help livestock farmers be profitable. They recognize that with price volatility that is now part of the corn and soybean markets, helping farmers learn how to use risk management tools is important to their long-term financial sustainability. The livestock initiative is working with partners like Ivy Tech to help develop programs to educate livestock farmers of all sizes on business management.

Right to Farm

Freedom to Farm

The Indiana General Assembly has declared a policy of the state to conserve, protect, and encourage the development and improvement of its agricultural land for the production of food and other agricultural products. The General Assembly has found that when nonagricultural land uses extend into agricultural areas, agricultural operations often become the subject of nuisance suits. As a result, agricultural operations are sometimes forced to cease operations, and many people may be discouraged from making investments in farm expansion. Farmers have the right to farm in Indiana; however, many people have taken steps to deem farms nuisances.

Background:

• Lawsuits against Indiana livestock farmers led by out of state tort lawyers who are claiming nuisance and trespassing on behalf of rural neighbors.
• Local land use ordinances and zoning plans are being opened and changed to make it more difficult to raise livestock.
• Increased regulations from environmental, transportation, labeling requirements, and labor laws and/or rules make it costly for agriculture to remain sustainable.
• USDA has gone from taking 18 months to deregulate new biotech traits to nearly 40 months due to the threat of lawsuits by anti-gmo groups if the trait is deregulated.

Lawsuits

When the law making process does not give people the decisions they are seeking to hinder the growth of livestock, people have turned to the judicial system as a tool to stop growth and expansion in the livestock industry. Currently, 14 lawsuits are pending against livestock farmers on the grounds of nuisance. These suits are being led by an out of state lawyer who has won several tort cases against large livestock companies in other states. The threat of lawsuits will keep Indiana farmers from expanding or diversifying their operations.

Local Zoning

When non-agriculture citizens decide to move to the country, many times they are unaware of the sounds, smells and sights which accompany country life. Farmers across the state have run into neighbors who are concerned with the farm practices and the infringement on their property or lives. As a result, many counties have been asked to open their zoning ordinances to reexamine setbacks for ag buildings and operations.

Increased Regulations

Corn and soybean farmers know regulations are necessary and needed to protect people and the environment from harm. However, many times regulations do not take into consideration the issues farmers face once these principles are implemented.

Examples of recent regulation reaches include:

• The EPA trying to take actions to supersede state authority in the Chesapeake Bay and other watersheds, the use of flawed models which do not reflect current agricultural and conservation practices.
• The Department of Labor (DOL) publishing a notice of proposed rulemaking to revise child labor regulations for young workers employed in agriculture. On February 1 the DOL announced it would re-propose a rule since their first efforts would make it nearly impossible for anyone under the age of 18 to participate in on-farm work.
• In California, Proposition 37 will be on the ballot this November. Proposition 37 would ban the sale of tens of thousands of perfectly-safe, common grocery products only in California unless they are specially repackaged, relabeled or made with higher cost ingredients. Prop 37 is a deceptive, deeply flawed food labeling scheme which would add more government bureaucracy and taxpayer costs, create new frivolous lawsuits, and increase food costs by billions — without providing any health or safety benefits. If this passes in California it would have grave implications across the country.

Right to Farm — Biotechnology

Biotechnology

American farmers embrace agricultural biotechnology – 94% of soybeans, 88% of corn, and 90% of cotton grown in the U.S. is a variety improved through modern biotechnology. According to the U.S. State Department, it will be necessary to produce as much food in the next 50 years as was produced during the previous 10,000 years combined. Science and innovation in agriculture will be required to produce this amount of food, feed and fiber in an environmentally sustainable way.

Historically, the United States has maintained its competitive advantage by being a leader in applying scientific rigor to a predictable biotechnology regulatory process. However, according to the USDA, between 1992 and 1999, the USDA, on average, took 178 days to “approve” a biotech crop; currently, that process takes two to five years. Conversely, the average time to approve a product in Brazil is 27 months. For the USDA, in 2010, the average time was 38.4 months. These delays have lengthened the time to 13 years for a new product to be available for commercialization in the U.S., which comes in at a cost of $136 million.

Despite an Autumn 2011 administrative pledge to streamline the regulatory process and remove inefficiencies in the regulatory process, the USDA only approved one product in 2012 — product which was backlogged due to litigation. No other new traits were deregulated during the year; yet, there were six traits submitted to the USDA in 2009 which were still awaiting a decision.

Need

Current production challenges, such as weed resistance, provide and urgent need for farmers to access new and innovative technologies.

• Recent studies reflect almost  one-third of all corn and soybean growers and two-thirds of all growers in the south have problems with weed resistance.
• Tools are now being developed in collaboration with farmers to address today’s challenges; needless delay only allows those problems to escalate and hurt farmers’ productivity, efficiency, and jeopardizes their stewardship efforts.
• Without diversification of current weed control practices, growers will be forced to revert to dated practices which present the risk of losing the environmental benefits gained from conservation tillage and herbicide-tolerant crops, such as reduced soil erosion and greenhouse gas emissions.
• With the escalation of genetically engineered product approvals throughout the globe, USDA’s delays in reviewing these products put U.S. producers at a disadvantage. Timely and predictable regulation of crops derived from modern biotechnology, bolsters APHIS’s international reputation and signals to trading partners a commitment to sound regulatory policy. This will help discourage a “precautionary approach” in other countries, encourage greater market access and promote trade.

Trade

Increased production and a consistent product makes the United States a reliable supplier of soybeans to the world market. Developing new markets for whole soybeans, soybean meal and soybean oil, helps the agriculture sector lead the nation in economic growth and international competitiveness. Over the last decade, U.S. soy exports have hit record levels, and today, more than half of annual soybean crop is exported.

Indiana Specific

Indiana’s agricultural products are too valuable to keep to ourselves, and exports of goods to foreign markets provide a number of benefits for the state’s agriculture industry. Soybeans lead Indiana’s agriculture sector in exports, in turn generating a total value $1.7 billion in revenue.

Indiana Soybean Alliance partners with the United States Soybean Export Council (USSEC) and the U.S. Grains Council on developing and expanding market opportunities with foreign partners. Both of these organizations receive funding through the USDA’s Market Access Program (MAP) and the Foreign Market Development (FMD) program.

Transportation

Transportation & Infrastructure

Funding for road, highway and bridge infrastructure across the United States has been flat over the past several years; however, the cost to maintain, repair or replace roads and structures has increased dramatically. Local communities and states are finding it difficult to properly maintain roads in order to meet public safety demands, as well as to foster future economic development. For agriculture, the condition of infrastructure is important to be competitive globally.

Roads and Bridges

Because infrastructure is important to soybean and corn marketing efforts, the Indiana Soybean Alliance and the Indiana Corn Marketing Council (ISA/ICMC) have partnered to commission an analysis on Indiana’s transportation infrastructure in six key agricultural counties. The analysis evaluates how infrastructure impacts agribusiness economic development through grain elevators and terminal facilities, biofuel plants, livestock production and food processing.

When infrastructure impedes traffic and the delivery of commodities/products, (e.g. bridge closures or weight limits), farmers delivering grain might have to take a 20 mile detour. With fuel prices demonstrating considerable volatility in recent years, a detour can become quite costly for a farmer or the elevator who has to bid higher to attract grain.

Based on the analysis in this report, the impact of driving an additional 20 miles under a $2.00 per gallon diesel price environment is 2-cents per bushel for corn or soybeans. If the diesel price is sustained at $4.00 per gallon, the impact increases to 3-cents per bushel for corn and 4-cents for soybeans.

Elevating suspect bridges and infrastructure to funding status starts by working at the local level with businesses and communities to highlight the value of the infrastructure to the county public works office and the state funding office. The infrastructure enables agribusiness to enhance local communities. The saying that “the squeaky wheel gets heard” is true. However, few communities are capable of organizing and making enough noise to attract attention.

ISA and ICMC also commissioned Informa Economics to look at each of the state’s 92 counties. The Indiana Transportation and Agricultural Infrastructure report is a compendium of Indiana’s transportation and agricultural infrastructure at the state and county level. The major transportation infrastructure including roads, railroads, navigable waterways and bridges with a sufficiency rating of less than 80 were identified and mapped along with the agricultural features for each of Indiana’s 92 counties.

More on this research study can be found here.

Railroads

Over the past few years, issues related to rail transportation have emerged as major concerns for soybean farmers across the United States. Industry reports have indicated that soybean farmers’ profitability is being negatively impacted by the escalating costs associated with rail transportation.

The Indiana Soybean Alliance worked with other soybean checkoff organizations, producer and consumer groups to establish the Soybean Transportation Coalition (STC). The focus of this coalition is to address rail rate, service and capacity issues that affect soybean producer profitability and competitiveness. The main goals of the STC are to position soybean industry stakeholders to benefit from a transportation system which delivers cost-effective, reliable and competitive service, and to maintain a soybean industry coalition focused on immediate and long-term transportation issues and outcomes.

Indiana Soybean Alliance has two farmer-directors on STC’s board of directors: Joe Steinkamp of Evansville, Ind. and Joe Tuholski of LaPorte, Ind. For more information visit http://www.soytransportation.org/.

Waterways

The country’s inland navigation system plays a critical role in the nation’s economy, moving at least a billion tons of domestic commerce valued at more than $300 billion annually. In addition, more than one billion bushels of grain, or roughly 60 percent of all grain exports, move to export markets via the inland waterways each year. Investment in the Upper Mississippi and Illinois rivers has not kept pace with the needs of the transportation sector; the lock system, at over 80 years old, is outdated, deteriorating, and cannot accommodate modern barging practices.

Locks and Dams

A long-term plan, such as the Capital Development Plan, which was formulated by the waterways industry and Corps of Engineers, is needed to improve the program management and provide a sufficient and reliable funding mechanism. Rep. Ed Whitfield (R-KY) and Rep. Jerry Costello (D-IL) have introduced H.R. 4342, the Waterways are Vital for the Economy, Energy, Efficiency, and Environment Act of 2012 (WAVE4), which would implement the Capital Development Plan into law.

The Capital Development Plan and WAVE4 are supported by industry stakeholders as a way to fund the navigation system. The proposal prioritizes navigation projects across the entire system, improves the Corps of Engineers’ project management and processes to deliver projects on time and on budget, and recommends a funding mechanism that is affordable and meets the system’s needs.

The recommendations add a cost-share cap on all new lock construction projects that would preserve the Inland Waterways Trust Fund by preventing the industry from having to fund significant cost overruns. The plan also calls for an increase in the 20-cents-per-gallon fuel tax currently paid by the barge and towing industry to improve the future viability and efficiency of the inland waterways system.

The lock and dam infrastructure on the Mississippi River system has exceeded its intended lifespan, is deteriorating and in danger of experiencing a catastrophic failure. The WRDA of 2007 authorized $2.2 billion for construction of new 1,200-foot locks at Locks 20, 21, 22, 24 and 25 on the Upper Mississippi and at LaGrange and Peoria Locks on the Illinois River.

The authorized projects are supposed to be funded through annual appropriations and the Inland Waterways Trust Fund. However, little has been appropriated by Congress, the trust fund has a significant backlog, and a cumbersome and inefficient administrative process at the U.S. Army Corps has resulted in no progress on the modernization of the locks and dams on the Upper Mississippi River System.

Dredging

Annual funding must be provided to ensure the Lower Mississippi River remains fully open for commerce. The inland waterways navigation system, especially the Mississippi River, is a vital asset in the movement of important commodities such as grain, coal, steel, petroleum and aggregate materials. Dredging of this critical artery must be maintained and there have been funding shortfalls over the past several years.

To address the funding for dredging, soybean and corn farmers through ISA and ICGA support the Realize America’s Maritime Promise (RAMP) Act (H.R. 104) and the Harbor Maintenance Act of 2011 (S. 412). The goal of these companion bills is to establish a firewall around the monies collected via the Harbor Maintenance Tax (HMT) for the Harbor Maintenance Trust Fund (HMTF). The bills require that all funds from the HMTF be used solely for dredging and harbor maintenance. The HMT is collected as an ad valorem tax of .125% on imported cargo arriving into the United States. Over the last decade or so only about half the funds collected have actually been appropriated for their intended purposes, including maintenance dredging of deep waterways. The HMT generates about $1.5 billion annually while Congress has appropriated an average of about $735 million, with the unused funds added to the general treasury and used for other non-maritime projects. If the HMTF was fully applied to the approved projects, as originally intended, there would not be an annual shortfall of funding to dredge our nation’s waterways.

No checkoff dollars were used in the funding of this piece.