August 14, 2015
CapitalPress.com
9
Washington
Farm tax breaks up for review by panel
Auditor urges
clarification on
policy goals
By DON JENKINS
Capital Press
OLYMPIA — A slew of
tax breaks that save farm-
ers and ranchers millions of
dollars annually on tractor
repairs, diesel fuel, chicken
bedding and others goods and
services are up for scrutiny by
a watchdog panel.
Since 2007 a citizens com-
mission has been grinding
through more than 600 state
laws that grant preferential
tax treatment to individuals
and industries. This year hap-
pens to be agriculture’s turn
to be a focus, said Legislative
Auditor Keenan Konopaski,
who heads a nonpartisan staff
of policy analysts.
The commission has no
tax-writing authority, though
it makes recommendations
to the Legislature. Lawmak-
ers established the panel to
address concern about tax
“loopholes.” Tax exemp-
tions, nevertheless, continue
to remain widely popular
with legislators. This year,
the Legislature extended tax
breaks for food processors
and beekeepers.
At least seven tax laws
that benefit sectors of agri-
culture will get a close look
by the commission between
now and December.
Konopaski isn’t proposing
that any tax break be elimi-
nated, though he is asking
the five-member commission
to clarify the purpose and, in
some cases, set standards to
judge the public benefit of
the exemptions.
The tax laws up for review
are:
• A sales tax exemption on
replacement parts and repair
services for farm equipment
that will save producers
an estimated $62.2 million
over the next two years. The
Legislature granted the tax
break in 2006 in response to
increasing production costs
and stagnating crop pric-
es. Since then, according to
legislative staff, production
costs rose by 38 percent,
while farm income increased
by 141 percent. Auditors are
asking whether the Legisla-
ture’s rationale in granting
the tax break still applies.
• A sales tax exemption on
diesel, biodiesel and aircraft
fuel consumed to grow crops
that will save farmers an es-
timated $53.2 million over
the next two years. The tax
break was granted in 2006
while diesel prices were ris-
ing. Lawmakers enacted an
emergency clause, putting
the exemption in place in
time for spring planting.
Even if the sales tax ex-
emption were eliminated,
farmers would be exempt
from fuel taxes for tractors
and other off-road vehicles.
• Distributors of grains
and unprocessed milk, such
as grain elevators and co-
operatives, are exempt from
business taxes on wholesale
income. The exemption will
save distributors an estimat-
ed $14.8 million over the
next two years. The law goes
back to 1939 when sales of
wheat, barley and oats were
exempted from taxes. Other
crops were added over the
years, and unprocessed milk
was added in 2007. It’s un-
clear why lawmakers pro-
vided the exemption to some
crops, but not to other agri-
cultural products, according
to auditors.
• Medicine for farm an-
imals is exempt from sales
taxes. Producers will save an
estimated $5.4 million over
the next two years. Legisla-
tive analysts say lawmakers
should explain the policy’s
objective.
• Bedding materials for
chickens and propane or
natural gas to heat chicken
coops are exempt from sales
taxes. The exemptions will
save poultry producers an es-
timated $5.3 million over the
next two years.
• The value of a fami-
ly-owned farm can be de-
ducted in calculating estate
taxes, helping keep the farm
in the family. That’s fine,
according to auditors. But
they question whether heirs
should then be free to imme-
diately sell the farm without
paying estate taxes.
• Builders are exempt from
sales taxes on materials and
labor to build or equip ware-
houses and grain elevators.
Auditors suggested measur-
ing whether the tax exemption
was stimulating trade.
Inslee’s trade
trip to include
pitches for spuds,
blueberries, wine
Delegation to
promote Washington
goods in Japan,
South Korea
By DON JENKINS
Capital Press
OLYMPIA — Washing-
ton potato growers, blueberry
farmers and wine-makers will
be represented on a trade mis-
sion this month to Japan and
South Korea led by Gov. Jay
Inslee.
All three agriculture groups
have ambitions to increase
sales in Asia. Potato and blue-
berry farmers hope to capitalize
if trade barriers come down,
while vintners are pitching
Washington wines to retail out-
lets in Korea.
About 60 business and gov-
ernment leaders, including state
Agriculture Director Derek
Sandison, are expected to make
the trip to promote Washington
agriculture, aerospace, manu-
facturing and technology in-
dustries.
Inslee will leave Aug. 28
and begin by meeting with
government and business lead-
ers in Seoul, South Korea. The
trip will end with a display of
Washington food and wine at a
Tokyo Costco. In between, the
delegation will travel to Wash-
ington’s sister state in Korea,
North Jeolla province, and the
Japanese cities Kobe and Na-
goya.
Washington exported $1.6
billion worth of agricultural
goods to Japan last year, in-
cluding $218 million in frozen
potatoes, despite an 8.5 percent
tariff.
The Washington State Pota-
to Commission hopes sales will
increase if the Trans-Pacific
Partnership does away with the
tariff, the commission’s assis-
tant executive director, Matt
Harris, said. The 12-nation pact
is being negotiated in secret and
hasn’t been presented to Con-
gress for ratification.
Washington saw frozen po-
tato sales to Korea jump from
about $40 million to $62 mil-
lion annually in 2014 after a
U.S.-Korea free-trade agree-
ment was signed in 2012, elim-
inating an 18.5 percent tariff.
“We haven’t seen (sales)
slow down yet. We hope we
haven’t hit that plateau of
growth,” Harris said.
Harris and the commission’s
marketing director, Ryan Hol-
terhoff, will make the trip to
firm up relations with distribu-
tors and probe how consumers
can be won over. “It is import-
ant for us to make connections
to customers,” Harris said. “To
show we care.”
The blueberry industry has
been looking toward Asia for
customers as production has in-
creased. The U.S. Department
of Agriculture has purchased
surplus blueberries for food
banks and soup kitchens to sta-
bilize prices.
“We know the handwriting
is on the wall. We need to de-
velop new markets,” Washing-
ton State Blueberry Commis-
sion Executive Director Alan
Schreiber said.
Washington blueberry farm-
ers hope to gain permission to
sell fresh berries to Korea. Or-
egon farmers gained access in
2012 after 10 years of negotia-
tions to set food-safety regula-
tions.
Schreiber said he hoped that
Washington farmers will win
access “within three years.”
The trade trip won’t yield any
immediate results, but it’s im-
portant to “show the flag,” he
said.
“Foreign markets take time
to develop, and this is just one
of the things you do,” Schreiber
said.
Washington State Wine
Commission will focus on the
Korean leg of the trip, the com-
mission’s president, Steve War-
ner, said.
Japan already represents 9
percent of Washington wine
exports, while Korea takes in
4.1 percent.
Washington wines are avail-
able for on-premise consump-
tion at Western-style restau-
rants and hotels in Korea, but
they need to break into more
retail outlets.
“In order to be successful,
we have to do on-premise and
off-premise,” he said.
“We’re just scratching the
surface,” Warner said. “I’m re-
ally happy with where we are,
and I think there are tremen-
dous opportunities.”
Washington exported $469
million in agricultural products
last year to South Korea.
Dan Wheat/Capital Press
Joshua Adkins, a Syngenta research and development scientist, talks to growers about disease control in dry beans during a field day
south of Ephrata, Wash., on Aug. 5.
Farmers get a look at new pesticide products
By DAN WHEAT
Capital Press
EPHRATA, Wash. — New
fungicides for potatoes, under
the brand name Orondis, will
be released in the U.S. by Syn-
genta next year.
The active ingredient, Ox-
athiapiprolin, is good against
late blight and is an entirely
new mode of action, said Josh-
ua Adkins, a Syngenta research
and development scientist.
Adkins was one of several
personnel of the global agro-
chemical and seed company
talking about new Syngenta
ingredient in Aprovia to con-
trol powdery mildew and scab
on apples, pears and grapes.
Solatenol is mixed with
other active ingredients in Ela-
tus for potatoes and Trivapro
for cereal grains and corn.
Mixed with Azoxystrobin
in Elatus for potatoes, Solate-
nol is excellent in crop safety,
preventive fungicidal activity
and in standing up to rain, Ad-
kins said. It fits into resistance
management programs with
no cross-resistance to strobi-
lurin or triazole fungicides and
is excellent in combating Rhi-
zoctonia fungi.
Solatenol
demonstrates
similar qualities in Trivapro
for wheat, he said.
Sedaxane is the active in-
gredient in Vibrance fungicide
blended with other seed treat-
ments depending on the crop.
It is used in soybeans, corn,
wheat and pulse crops and just
getting registered for potatoes.
Bicyclopyrone is the ac-
tive ingredient in Acuron, a
broad-spectrum herbicide for
field and sweet corn. It also
will be used for a new product,
yet to be named, for launch in
2017 for weed control in cere-
als.
Groups support senators for backing trade authority
By MATTHEW WEAVER
Capital Press
Agriculture groups in Wash-
ington state are supporting their
U.S. senators for backing fast-
track trade promotion authority
for President Barack Obama.
Seventeen of the state’s ag-
riculture groups are defending
Sens. Patty Murray and Maria
Cantwell against criticism from
within their own Democratic
party for supporting fast-track
authority.
Organizations signing a let-
ter of support include the Hop
Growers of Washington, the
U.S. Pea and Lentil Associa-
tion, the Washington Cattle-
men’s Association, the Wash-
ington Association of Grape
Growers, Washington Farm
Bureau, Washington Friends
of Farms and Forests, Wash-
ington State Fruit Commission,
Washington State Potato Com-
mission, Washington Grain
Commission and Washington
Association of Wheat Growers.
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• Term agricultural loans
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products to more than 100 up-
per Columbia Basin growers at
a Syngenta field day at Qualls
Agricultural
Laboratories
south of Ephrata, Aug. 5.
“It’s very effective at low
rates so that’s exciting because
we’re able to control disease
with less product,” Adkins
said.
Solatenol is an active ingre-
dient in Syngenta’s first foliar
SDHI (succinate dehydroge-
nase inhibitor) fungicides that
are being registered this year
and will be on the market in
2016.
Solatenol is the sole active
• FSA Preferred Lender
“Agriculture is very
trade-dependent,” said Ni-
cole Berg, WAWG national
legislation committee chair
and a Paterson, Wash., farm-
er. “We need to have stable,
consistent trade policy. This
issue needs to be done on a
bipartisan concept, which
is something that it seems
in politics today is not quite
there.”
The groups felt Cantwell’s
and Murray’s efforts needed
to be validated and appreciat-
ed, Berg said.
“There were not a lot of
Democrats that went on this
issue, there was a divide on
giving the president that
authority,” said John Stuhl-
miller, CEO for the Farm
Bureau. “We’re grateful that
they bucked the party on that
one and went with what’s good
for the state, which is increased
opportunities for trade.”
The ag groups see fast-track
authority as critical for nego-
tiating the Trans-Pacific Part-
nership free trade agreement,
which includes 12 countries,
including the United States, Ja-
pan, Mexico, Canada and Aus-
tralia. Stuhlmiller said final lan-
guage for the TPP agreement
could be presented to Congress
by the end of the year.
Fast-track authority means
the Senate can only take an up-
or-down vote on a trade pact
and cannot modify it.
Congratulations to Oregon’s
cattle and calf producers on
becoming Oregon’s #1
agricultural commodity.*
When one sector
of Oregon
agriculture
succeeds,
we all do.
Here’s to
future growth.
• Amortizations
up to 25 years
From your
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www.oan.org
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joe@arrien.biz
33-2/#17
*Source: Oregon Agriculture Facts and Figures, July 2015
33-2/#8