10 CapitalPress.com
July 8, 2016
Ag industry gears up to oppose gross receipts tax
By PARIS ACHEN
Capital Bureau
SALEM — The Oregon
agricultural industry is gear-
ing up for battle against a
campaign to pass a corporate
sales tax measure on the No-
vember ballot by shedding
light on how the tax will af-
fect individual companies and
farmers.
Under Initiative Petition
28, the Mt. Angel-based Wilco
farm supplies and fuel cooper-
ative faces a 1,388-percent in-
crease in its state corporate in-
come tax bill, from $168,000
to $2.5 million per year, CEO
Doug Hoffman said.
The tax would apply only
to the $100 million in sales at
Wilco Farm Stores in Oregon;
direct sales to the coopera-
tive’s 3,000 members are ex-
empt, Hoffman said.
The ballot measure targets
C corporations, imposing a
2.5 percent tax on their Ore-
gon gross sales exceeding $25
million. It’s expected to raise
EO Media Group
Oregon agricultural interests say a ballot measure that would raise
more than $3 billion in new tax revenue a year will increase the
costs of inputs for farmers.
about $3 billion a year in new
state revenue.
The nonpartisan Legisla-
tive Revenue Ofice says the
tax will act largely as a con-
sumption tax, raising prices
for consumers and businesses.
The union-backed cam-
paign A Better Oregon says
the state needs that revenue
to bolster support for educa-
tion, health care and senior
services. Proponents also note
that corporations’ income tax
contributions to state revenue
has declined as a percentage
from 18.5 in the mid-1970s to
6.7 now, according to a study
by the Oregon Public Policy
Center.
While the campaign says
the tax targets big out-of-state
corporations, it also affects
some Oregon businesses with
high sales receipts but rela-
tively low proit margins, said
Dave Dillon, executive vice
president of the Oregon Farm
Bureau.
Wilco typically nets in-
come of 2.5 to 3.75 percent
of gross sales, Hoffman said.
In some years, such as 2009,
the company doesn’t make a
proit. One reason he opposes
IP 28 is that even companies
that lose money have to pay
the tax as long as their gross
sales exceed $25 million.
Supporters are unmoved.
“A Better Oregon was spe-
ciically designed to protect
farm co-ops and it won’t raise
taxes on the supplies farmers
buy through their co-ops,”
said Katherine Driessen, a
campaign
spokeswoman.
“A Better Oregon was also
designed to make large pes-
ticide companies like Wilco
and Monsanto pay their fair
share in taxes. Based on the
claims that Wilco has made,
it has to do at least $100 mil-
lion in non-farm co-op sales.
It can and should pay more to
support or schools and critical
services.”
Dillon said those extra
costs will be passed onto farm-
ers.
The impact of the tax could
be felt at every point of sale, as
suppliers and retailers increase
prices to cover their additional
costs.
The gas and diesel that Wil-
co sells, for instance, changes
hands several times before
it gets to the end consumer,
Hoffman said. By that time,
the tax may push the cost up 5
to 7 percent, he said.
That will impact farmers
who have to drive their prod-
ucts to market. The tax also
will drive up the cost of fer-
tilizer, farming equipment and
other necessities for producing
and selling a crop, Dillon said.
“We are going to have
folks out of work, and there
isn’t going to be an economy
to pick them up,” said Katie
Fast, executive director of Or-
egonians for Food and Shelter.
The tax is estimated to slow
growth in private sector jobs by
38,000 in the next ive years
years, but public sector jobs
would grow by 17,000 in the
next ive years, according to the
Legislative Revenue Ofice.
A recent study by Portland
State University, commis-
sioned by A Better Oregon,
found that the tax would boost
public sector jobs by 33,600
by 2027 and slow growth in
private sector jobs by 13,500.
“You don’t see Wilco take
a stand on many things,”
Hoffman said. “We believe
we have the story that touches
people in a small way. It will
affect us and our consumers
We couldn’t let it stand and
suck it up and not get in-
volved.”
New chairman: Washington potato
industry reaches out to lawmakers
USDA continues to
prime trade with Cuba
New chemical
products, port
protection vital,
Calloway says
Capital Press
By MATTHEW WEAVER
Capital Press
Don Jenkins/Capital Press
Quincy, Wash., grower Rex Calloway, center, helps serve potatoes Feb. 10, 2015, in the Legislative
Building in Olympia on Potato Day. The Washington State Potato Commission’s director of industry
outreach Matthew Blua, left, and director of marketing and industry affairs, Ryan Holterhoff, also
served up spuds. Calloway will serve a one-year term as chairman of the commission board.
Courtesy Washington State Potato Commission
Quincy, Wash., farmer Rex Calloway takes over as chairman of the
Washington State Potato Commission executive committee from
Mike Dodds, raw material and environmental manager at Basic
American Foods in Moses Lake, Wash.
search commitment is strong
with a tri-state consortium in
Washington, Idaho and Or-
egon universities. Calloway
said that will continue, with
the development of products
that work for farmers and are
environmentally sound, in the
face of more environmental
regulations on chemicals.
“We need to continue to
be good stewards of those
products, use them correctly
and protect what we have,” he
said.
Calloway said the commis-
sion’s efforts will continue to
support existing markets and
develop new ones. The com-
mission will continue to work
with federal legislators to pro-
tect ports and avoid further
labor issues, such as a slow-
down in West Coast container
ports in 2014.
“We can’t afford to go
through that again,” Calloway
said.
Calloway praised the
state’s potato farmers for their
involvement whenever con-
fonted with a problem.
“We have everything we
need in the Northwest to raise
a great crop – great ground,
great climate and water,” he
said. “We need to (recognize)
what we have, take care of
what we have and help protect
it.”
Calloway replaces Mike
Dodds as chairman. Other
members are irst vice chair
Stacy Kniveton of Pasco;,
second vice chair Roger Haw-
ley of Burlington; secretary
Mike Madsen of Plymouth;
and treasurer Derek Daven-
port of Pasco.
Nelson Cox of Warden
and Darrin Morrison of
Mount Vernon both stepped
down from the board after
eight years and 12 years,
respectively, according to a
potato commission press re-
lease.
Anticipating action in Con-
gress to restart agricultural trade
with Cuba after a long hiatus,
USDA is working to put the
pieces in place that will lead
to greater opportunity for U.S.
farmers.
The island nation of 11 mil-
lion people imported almost $2
billion in agricultural goods in
2014, including $300 million
from the U.S. But those num-
bers were down in 2015, drop-
ping 48 percent to $148.8 mil-
lion, and a steep decline from
the more than $600 million in
2008, USDA Acting Deputy
Under Secretary Michael Scuse
said in conference call with the
press on June 28.
“We’ve seen a tremendous
drop in trade,” he said.
Agriculture has been limit-
ed by cash-only trade, unable
to use the trade promotion and
credit assistance programs that
are “hugely successful” in trade
with other countries, he said.
“Those are tremendous bar-
riers. If we can eliminate those
barriers, I think we’ll see a tre-
mendous increase in our exports
to Cuba,” he said.
Agriculture is going to be
key in trade between the nations,
but Congress has to make legis-
lative changes to allow things to
move forward, he said.
The Senate Appropriations
Committee took major steps in
that direction last week, includ-
ing voting to lift the bans on
export inancing and travel to
Cuba, Scuse said.
“We’re hopeful the House
will agree to the measures put
forth in the Senate,” he said,
adding that he thinks more
members of Congress are seeing
the need.
Meanwhile, USDA is mov-
ing forward, laying the ground-
work that will help restart
long-dormant agricultural rela-
tionships, he said.
USDA and the Cuban Min-
istry of Agriculture have signed
an memorandum of understand-
ing to increase bilateral cooper-
ation in agriculture, and USDA
sent a technical team to Cuba to
identify those areas.
USDA is also authorizing 22
commodity research and pro-
motion programs to use funding
Capital Press ile
Michael Scuse, USDA under-
secretary of farm and foreign
agricultural services, said the
U.S. is working to open doors
for agricultural trade with Cuba.
for information-exchange activ-
ities with Cuba and so far has re-
ceived 11 requests to participate
in that program, he said.
The agency is also working
with the State Department to
establish a presence in the coun-
try, which is crucial to effective
trade relations, he said.
Many state departments of
agriculture in the U.S. have been
working on relationships with
Cuba since 2002, and numerous
state delegations have traveled
to the country over the past year
to try to build relationships with
Cuban government oficials, he
said.
USDA also recognizes the
need for companies and indus-
try representatives to visit the
country and build a foundation
for trade, he said.
Sitting just 90 miles off the
southeast coast of the U.S.,
Cuba offers plenty of opportu-
nity for U.S. ag products. The
U.S. has a huge advantage over
competitors — if nothing else,
just in transportation costs, he
said.
Poultry, soybean oil, soy-
beans and corn currently rep-
resent the majority of U.S. ag
exports to Cuba, but there is
plenty of opportunity for oth-
er products. Rice is one with
perhaps the highest potential,
given Cuba’s per-capita con-
sumption of the grain. Fruits
and vegetables also offer a lot
of potential, with demand ex-
pected to rise with the inlux of
U.S. tourists, he said.
Environmentalists fail to
stop Idaho logging project
By MATEUSZ PERKOWSKI
28-1/#7
Capital Press
28-1/#4x
The Washington pota-
to industry must work with
lawmakers to ensure they are
aware of farmers’ needs, the
new chairman of the state po-
tato commission says.
Quincy, Wash., potato
farmer Rex Calloway begins
his one-year term as chair-
man of the Washington State
Potato Commission executive
committee July 1. He raises
900 acres of potatoes for the
processing industry.
“We’re in an election year,
and obviously we’re going to
have new legislators proba-
bly come in,” Calloway said.
“It’s important for the potato
industry and agriculture in
general to be in contact with
our legislators. There’s a lot
of things in state government
that will have a lot of bearing
on the potato industry.”
Calloway said farmers
need to “conscious and pro-
active” when working with
lawmakers, the better to help
them understand agriculture’s
needs and work together.
“Education is a big part of
that,” he said. “Taxes and reg-
ulations, those things hurt us.
Money is an issue, whether
it’s education, environmen-
tal or everything. Everything
needs to function, but we also
can’t be taking away from the
ag industry to support some-
thing else.”
The commission’s re-
By CAROL RYAN DUMAS
Environmentalists have failed
to persuade a federal judge to
block the irst phase of a logging
project in Idaho’s Payette Nation-
al Forest.
The Alliance for the Wild
Rockies, Idaho Sporting Con-
gress and Native Ecosystems
Council iled a lawsuit against
the U.S. Forest Service last year
over the 80,000-acre Lost Creek/
Boulder Creek Restoration Proj-
ect.
The agency approved the
project to improve forest condi-
tions and reduce wildire risk, but
the environmental groups claim
the decision violates the National
Environmental Policy Act.
The plaintiffs requested a
temporary restraining order to
stop the initial 1,000-acre timber
sale in the project area, which is
to begin imminently, but U.S.
District Judge Edward Lodge has
denied that motion. Lodge found
that the plaintiffs are unlikely to
prevail on their claims that the
Forest Service didn’t adequately
analyze the project’s environ-
mental impacts under NEPA.
The environmental groups
also haven’t shown they’d suffer
speciic irreparable harms from
the timber sale or that a tempo-
rary restraining order would ben-
eit the public, he said.