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Discussions begin on 2018 Farm Bill and Margin Protection Program

The National Milk Producers Federation (NMPF) was invited to testify to Congress in late July during a hearing on the 2018 Farm Bill.

NMPF said Congress must revise the dairy safety net program established in the 2014 Farm Bill to provide farmers with effective risk management protection that will increase participation in the program.

NMPF said that while the dairy Margin Protection Program (MPP) remains the right program for the dairy industry, “the changes Congress made to the MPP when writing the last Farm Bill rendered it ineffective when dairy farmers needed it the most.”

In calendar year 2015, dairy farmers paid more than $70 million into the MPP and received payments totaling just $730,000.

In 2016, those figures were $20 million and $13 million.

NMPF said farmers found that the program was not helpful during two years that were particularly detrimental to the dairy industry. As a result, many of them have become disenchanted with the program, and participation has dwindled.

In making the case for improving the MPP, NMPF detailed a list of proposed changes NMPF and its members had developed to improve it. The MPP is designed to help farmers insure against either low milk prices or high feed costs, but the determination of the feed price used in the margin calculation is problematic.

During the farm bill process, NMPF’s original proposed feed formula, though considered accurate, was cut by 10 percent to address other budget concerns. Based on the government profit made on the program, concerns about budget that led to the 10-percent cut were misplaced, NMPF explained.

NMPF said it is also important to expand dairy farmers’ access to additional risk management tools like the Livestock Gross Margin for Dairy Cattle (LGM) program and similar programs that could be offered by USDA.

“Making the [MPP] program more attractive for dairy farmers is vital to ensuring participation in the program, and the safety of America’s dairy industry.”

NMPF also touched on several other policy challenges affecting U.S. dairy farmers, including immigration and labor shortages, and the vitality of U.S. dairy trade as NAFTA renegotiations begin.

Statewide ag organizations challenge new permit requirement by Ecology

Washington State Dairy Federation and Washington Farm Bureau filed a joint appeal in February that challenges the recent Concentrated Animal Feeding Operation permits issued by the Department of Ecology.

Ecology has approved a state-only permit to address groundwater and a combined state-federal permit to address groundwater and surface water.

The permits went into effect in early March and are still available to dairy farmers who wish to apply for coverage. The intent of the appeal is to address elements that make the permits burdensome and unaffordable for most dairies.

“The requirements of the permits will make it harder to manage dairy nutrients,” said Dairy Federation Executive Director Dan Wood. “The intent is to set guidelines for environmental protection, but the requirements of the permits will make it harder to do that.”

Dairy farms are already regulated under the state Dairy Nutrient Management Act, and each dairy has one or more lagoons for holding nutrients (dairy manure) until the appropriate time to spread the nutrients as fertilizer.

The federal Natural Resource Conservation Service provides standards for dairy lagoon construction and maintenance. Most dairy lagoons are lined with clay, and some are lined with synthetic material.

“Dairy nutrients are a highly-valued natural fertilizer used to grow crops on dairies as well as on adjoining farms,” said Washington Farm Bureau Chief Executive Officer John Stuhlmiller. “Dairy is the state’s second-largest agricultural commodity and is extremely important to our state economy. It’s important to note that the nutrients from dairy operations are important to a lot of other farmers across the state, especially those growing organic crops. It’s a dependable supply of natural, healthy fertilizer.”

The appeal states the permits “impose management constraints that are contrary to the water quality protections the CAFO Permits seek to obtain, impose restrictions on the operations of dairy farms that would decrease rather than increase water quality protection, will cause WSDF members to suffer economic loss with no or no meaningful corresponding protection of water quality, and include terms that are unachievable because the CAFO Permits are divorced from the reality of Washington’s annual crop harvest, rainfall, and manure applications.”

“The permits failed to take into account some key farm management practices,” noted Stuhlmiller. “They require fall soil sampling after crop harvest but no later than October 1. A lot of farms haven’t even started their crop harvest by then, making it virtually impossible to comply with the demands of the permits.”

Stuhlmiller also noted that the testing requirements and nutrient application limitations are particularly counter-productive for Eastern Washington, where many fields see two harvests in the course of a year.

“There are a number of management restrictions that will result in less-productive crops, less uptake of the nutrients by the plants, and a need for bigger lagoons,” said Wood. “The regulations in the permits will work against good management practices.”

The appeal also notes that the Economic Impact Analysis “underestimates the actual impacts on small businesses posed by costs of complying with the CAFO Permits. First, the EIA underestimated the costs of soil sampling and the impact on permittees from the delay for planting winter crops. The EIA also fails to recognize any economic impacts from the loss of land caused, for example, by the 100- or 35- foot land buffers” required by one of the permits.

The appeal requests that certain aspects of the permits be reviewed and revised to be consistent with state and federal laws and agency-prescribed practices that already regulate the use of livestock nutrients.

The appeal is expected to be heard by the state Pollution Control Hearings Board in early December.

2017 Legislative Session Recap

After a regular 105-day session followed by three 30-day special sessions, the Legislature called it quits for 2017 (so far). These special sessions come as no surprise, as over the past several years the divided Legislature has typically needed special sessions to resolve its business. However, 2017 set a record for the number of days the Legislature was in session.

During the regular session, lawmakers agreed on a bipartisan 2017-19 transportation budget. They reached agreement on the biennial operating budget hours before a June 30th deadline, averting a state government shutdown. Included in that budget package was an education funding plan designed to meet the Supreme Court’s McCleary mandate primarily through a state levy swap. A reduction of the B&O tax rate on manufacturers that was included in the budget deal was subsequently vetoed by Gov. Jay Inslee, instilling further acrimony into an already bitterly divided and opaque budget process.

The Legislature ended the 3rd special session without passing a biennial capital budget. The Senate stood its ground and refused to pass a capital budget because the House did not pass a permanent fix to the Hirst rural water rights issue. As such, the projects in the proposed capital budget remain unfunded and stalled. Unless there is agreement on a Hirst fix, there will not be a 4th special session to pass a capital budget.

The issues listed below remain unresolved due to the Hirst/capital budget standoff between the two chambers.

  • Hirst Decision: Legislators failed to agree on fixing the crisis created by the state Supreme Court’s Hirst decision. The court ruled that Whatcom County failed to comply with the Growth Management Act requirements to protect water resources. The ruling requires the county to make an independent decision about legal water availability before approving or denying building permits that use wells for a water source. Or landowners may attempt to prove, via hydraulic analysis that their house has no impact in in stream flows due to water used in their house (almost impossible and very expensive).
  • Dairy Distillers: We, along with a diverse coalition, asked for funding in the capitol budget for innovative dairy nutrient management technology demonstration projects. Both House and Senate budgets generally reference one project in Eastern Washington and one in Western Washington. The Senate had $4 million for the Conservation Commission for pilot/demonstration projects. The House had $2 million for pilots and an additional $2 million in “non-shellfish” cost share funding that is broadly available, potentially to help with cost share on innovative nutrient management demonstration projects and other projects such as VSP or general cost share for water quality projects.
  • Voluntary Stewardship Program Projects: The operating budget includes $7.6 million in funding to continue planning work. Legislators considered funding for certain VSP projects as part of the Capital Budget. Eligible cost-share funding in the Senate Capital budget was $4 million for shellfish growing areas and $5 million for other parts of state. The House had $4 million for shellfish areas and $7 million available cost share in non-shellfish areas of state.
  • WSU Plant Sciences/WADDL: Legislators considered a proposal to fund two agricultural science buildings on the WSU Pullman campus. The House capital budget had $38.1 million for the first stage of the Global Animal Health Phase II project – the new home of the Washington Animal Disease Diagnostic Laboratory (WADDL). However, no funding was provided for the new Plant Sciences Building in the House budget. The Senate version of the capital budget provided $52 million for Plant Sciences and $23 million for Global Animal Health building. Both buildings are essential to Washington agriculture, and we support the funding of both projects but both like many things this is waiting on an agreement on Hirst and the capital budget.

Below is a list of issues that we worked on or were following during the legislative session, as well as updates on where those issues stand now.

  • Ag Workforce Study: SB 5285 requires the workforce training and education coordinating board to conduct a workforce assessment for the agriculture, natural resources, outdoor recreation, and environment sectors to assess the available data on current and projected employment levels and hiring demand for skilled mid-level workers in those sectors. The bill passed both chambers and was signed into law on May 4.
  • Agritourism: SB 5808 provides a higher level of liability protection for farm-based agritourism businesses. Under the bill, an agritourism professional is not liable for unintentional injury, loss, damage, or death resulting exclusively from the inherent risks of an agritourism activity, with certain exceptions. The bill requires every agritourism professional to post a specified warning notice at the site of an agritourism activity and to include the warning notice in written contracts. The bill was signed into law on May 5.
  • Beef Checkoff: SB 5793 originally raised the beef checkoff by $1 per head except for the first sale of green tagged calves. That version passed the Senate on March 7 by a vote of 30-19. In the House, the bill was amended in committee to increase the assessment by only 50 cents per head rather than $1. A 50-cent increase would generate approximately $500,000 in new revenue for the Beef Commission. The goal is to increase research capacity and fund a major beef marketing effort to consumers in the Puget Sound region. The bill stalled in the House and died. HB 2073, a bill requiring the Beef Commission to be more transparent with its actions and finances, passed both chambers easily and was signed into law by Gov. Inslee on May 8.
  • Brand Inspections Fees: SB 5750 would have increased the hourly rate and other fees for brand inspection services by the Washington State Department of Agriculture. The bill did not pass this year. During the interim, we have had conversations with WSDA on program efficiencies.
  • Cattle Feedlot Odor & Dust: SB 5196 is a step forward for cattle feeders and Ecology to address air quality. The bill codifies the best practices process in an air quality “agreement” the cattle feeders and Ecology developed and have operated under since the 1990’s. The bill passed both chambers and was signed by Gov. Inslee on May 5.
  • Distracted Driving: The Legislature updated the distracted driving laws this session. SB 5289 makes it illegal to hold a personal electronic device in either hand, watch a video, or use a hand or finger to compose, send, read, view, access, browse, transmit, save, or retrieve email, text messages, instant messages, photographs, or other electronic data. The bill does allow the minimal use of a finger to activate, deactivate, or initiate a function on the device. Gov. Inslee signed the bill on May 16 but vetoed the section delaying implementation of the bill. As a result, the bill took effect July 23, 2017.
  • Hazardous Substances Tax: HB 2182 would generally increase the hazardous substances tax from 0.7% to 0.9% on wholesale prices from purchaser of first possession of a hazardous substance includes fuel, fertilizer and pesticides. It passed the House 50-47 on April 12. It did not pass the Senate.
  • Paid Family Leave: The first iteration of a family and medical leave insurance program passed in 2007 but was never funded. The issue of paid family leave continued to poll extremely well across all demographics statewide. Legislators believed failure to find a legislative solution in 2017 would likely result in a statewide initiative backed by organized labor and like-minded social groups. The labor-backed HB 1116 went as far as the House Rules Committee, and SB 5149, a proposal friendlier to business, was introduced in the Senate. Neither bill passed during the regular session. Following prolonged discussions between the business community and worker advocates and a negotiated framework, the Legislature substantially amended the state’s family and medical leave insurance program and provided a funding mechanism. Generally speaking, the final bill allows most employees to take off up to 12 weeks of paid family leave and 12 weeks of paid disability leave, capped at 16 weeks total in a benefit year. Shared employer/employee payroll taxes will begin in 2019, and benefits begin in 2020. Certain exemptions and conditions apply. See additional information from WSDF regarding the details of the bill. The final version of the bill, SB 5975, passed a bipartisan Senate 37-12 and a bipartisan House 65-29 before being signed into law by the governor.
  • Pay Equity: Legislators attempted to update the state’s equal pay laws but could not come to agreement. HB 1506 would have expanded the scope and enforcement of current law. That bill passed the House during the regular session and the 1st and 2nd special sessions, but it did not pass the Senate. SB 5836 also failed to pass the Senate.
  • Pregnancy Accommodation: The Legislature passed a bipartisan, compromise bill to promote healthy outcomes for pregnant women and infants. Among other things, SB 5835 requires employers to provide reasonable accommodation in employment for pregnancy unless the accommodation would impose an undue hardship on the employer’s business. The bill passed the Legislature unanimously and was signed into law on May 16.
  • Real ID: Washington state driver’s licenses are currently out of compliance with the standards in the federal Real ID Act. SB 5008 solves this issue by creating a two-tier licensing system — a traditional driver’s license and an Enhanced Driver’s License (EDL). The requirements to obtain a traditional driver’s licenses will not change, but beginning in July 2018, the Department of Licensing will be required to mark those licenses as not complaint for federal purposes. Once the federal government begins enforcing Real ID, Washington residents will not be able to use a traditional license to fly or enter a federal facility like a military base. Instead, Washingtonians will need to use an EDL or other form of federally accepted identification.