Farm Progress

Ag Council head looks back at 2015, ahead to 2016 priorities.Arkansas Water Plan key priority.State grain marketing oversight moves ahead.

David Bennett, Associate Editor

January 4, 2016

7 Min Read

As usual, a host of issues were on the table when the Agricultural Council of Arkansas held its annual meeting in mid-December.

Andrew Grobmyer, executive vice-president of the council, spoke with Delta Farm Press about the organization’s positions and concerns heading into 2016. Among his comments:

On new resolutions and the state water plan…

“Most of the Ag Council’s policy remains in place from last year’s resolution document. But sometimes during the review process we have to react to what’s new.

“If you’re looking at some of the bigger policy changes we made, most are state-related. They include things like the state water plan, transportation funding, and grain merchandising that became necessary after the Turner Grain debacle.

“The state water plan, put together by the Arkansas Natural Resources Commission, is something we’ll be watching very closely since the legislature will soon consider legislation to implement new laws recommended by the water plan. We expect most of that next session, which begins in 2017. However, the groundwork for that is already underway.

“We’ll be focused on three primary areas. First, enhancing incentives for landowners and farmers to adopt water conservation practices. Lots of that will relate to things like reservoirs, tail-water recovery systems and land-leveling. We’re trying to make sure existing programs are attractive enough to invite and encourage participation.

“There’s also a need to apply incentives towards new irrigation water management technology – hardware and software. There are many products out there and soon more will come online. There’s a lot happening from the technology standpoint and we want to ensure they’re available to farms as quickly as possible.

“Second, we believe there should be a switch from groundwater to surface water where it makes sense. There are two major irrigation projects – on the Grand Prairie and Bayou Meto – and we want to increase funding for those at the state level. There’s a proposal in the water plan to increase the bond authority to the state and we’re backing that.

“The third component is we want to increase the amount of available surface water. We’re currently limited to 25 percent excess flow for non-riparian use. That means a lot of water is passing through the state and not being utilized. We believe that needs to change through legislation to get it up around 75 percent. It would be a safe and smart way to get the excess flow out to farmers who need it and alleviate pressure on groundwater.”

Trade, transportion

On transportation and trade…  

“On the transportation front, the state and feds are still wrestling with how to deal with a loss of revenue for highways. That’s because increased fuel efficiency has cut into the necessary funds.

“The most obvious place for a solution is the Motor Fuels Tax. Part of the council’s resolution document provides some guidance to the governor on what may be acceptable to our industry. The governor is currently looking at some recommendations from a blue ribbon committee.

“We are concerned that if a funding solution is not found, rural roads will be the first to suffer due to lack of attention. It’s most likely that the state’s funding priorities will center on where the greatest vehicle traffic exists even though agriculture is more than a fifth of the state’s economy and probably the most dependent on transportation infrastructure. We’ve got to find a funding solution or pay the consequences of not maintaining and growing our infrastructure.

“On trade, certainly Cuba is very much at the forefront and we very much support the efforts being made by our Congressional delegation, our governor and others. Hopefully, there will be normalcy to our trade relations there in the near future. Cuba as an export market offers a great deal for Arkansas agriculture.

“With regard to the Trans Pacific Partnership, we’re still in the process of trying to digest what’s in the multi-lateral trade deal. Overall, we see some good market opportunities for exports. But there are also plenty of benefits for Asians moving their products to countries where we already have significant market share. The question is does the deal strike the right balance? Is it a net positive for all of our commodities? There are some concerns that some of our competitors will have market access advantages for things like rice.”

New budget

On Congress passing a budget…

“Lately, Congress is doing budgets outside regular order. They’re rushing to get budgets done at the end of the year even though things have been in the works for many months. That makes producers nervous.

“However, we’re happy that many of the priorities being pushed by the agricultural sector were included in both the appropriations side and the tax side of what was done just before Christmas. We had depreciation and Section 179 at the top of our list and we were glad to see them extended. With lower commodity prices, instability in tax policy isn’t welcome.

“On the appropriations side, the omnibus was truly a massive bill as everything was lumped together. Generally, it looks like many – not all -- of our priorities were taken care of. At least there’s some certainty on spending through the end of this fiscal year.”

On calling for a feasibility study for fertilizer operations in Arkansas…

“That’s been part of our policy positions for a few years now. I don’t know how likely it is to happen but we’d love a study to be conducted. It would be great to have a fertilizer producer, or two, to emerge in the region.

“With the lower natural gas prices as a key input to fertilizer it might lure some development of the industry in the United States if not in our backyard. That would give us some more fertilizer options and help keep input prices down.”

On the meeting…

“The annual meeting was great. It’s always an opportunity for our leaders to come together at the end of the year, network, celebrate the season and prepare for the next year. The gathering allows our members to interact with other ag leaders in the state and gain insightful information through the presentations.

“We heard from speakers on a wide range of subjects from weather and political forecasts to agricultural technology and commodity market analysis. We’re seeing a slowdown with commodity prices across the board, but there is optimism that will turn around in time. It’s certainly the most challenging force in agriculture today.

“The final panel discussion was headed by Rick Cartwright and involved University of Arkansas specialists and scientists. They went into depth on how farmers can save money while maintaining yields. That really hit home with our audience and they asked a lot of questions.

“The top advice they provided was probably that proper use of irrigation water is the quickest way to get at some expenses. Pipe Planner and PHAUCET were plugged repeatedly. By using them, not only are you saving time but also fuel costs and all the other benefits.”

Grain marketing

On Arkansas’ grain marketing regulations (Act 601)…

“We worked diligently on that with folks at the Plant Board, Farm Bureau and many others. The goal was to shape policies to protect farmers and other businesses from situations like happened with Turner Grain. This was done pretty rapidly considering it was 2014 when Turner Grain went under. With all the players involved, to be able to get this done in a year is remarkable.”

The council’s updated resolutions include the following:

The following components of Act 601 are important in protecting farmers from falling victim to a similar business failure in the future:

  1. Requirement that grain dealer businesses to be registered and licensed with the State Plant Board;

  2. Requirement that grain dealers to prove a minimal level of creditworthiness;

  3. Requirement that grain dealers to file annual reports to the State Plant Board (better record keeping);

  4. Granting the Plant Board authority to conduct periodic examinations and audits;

  5. Granting the Plant Board authority to revoke licenses, suspend operations, and take receivership;

  6. Setting new penalties for grain dealers who operate out of compliance with the law;

  7. Requirement that the State Plant Board publish on their website a list of all licensed grain dealers in the state; and

  8. Establishment of a hot-line for sellers to report late payments from grain dealers.

Anything else?

“The council has 60 positions on the board of directors and we welcomed in a few new ones this year from different parts of the state. Our board is top-notch with many excellent farmers and business leaders. We have several new and emerging leaders moving up the ranks and we’re excited about the future.”

About the Author(s)

David Bennett

Associate Editor, Delta Farm Press

David Bennett, associate editor for Delta Farm Press, is an Arkansan. He worked with a daily newspaper before joining Farm Press in 1994. Bennett writes about legislative and crop related issues in the Mid-South states.

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