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Editorials are written by or
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Capital Press Editorial Board.
August 26, 2016
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the opinions of the authors but
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Opinion
Editorial Board
Publisher
Editor
Managing Editor
Mike O’Brien
Joe Beach
Carl Sampson
opinions@capitalpress.com Online: www.capitalpress.com/opinion
O ur V iew
Initiative has something for everyone not to like
e’ll just blurt this out: We don’t see
any need to raise taxes in Washing-
ton state — or any other state, for that
W
matter.
Yet voters in several states this fall will see
tax-increase initiatives on their general election
ballots.
Every election, special interest groups and
politicians cook up ideas for spending OPM —
Other People’s Money.
They say they want to save the climate, pay
for schools, feed the needy and any number of
other goals. But their “solution” for accomplish-
ing these goals is heaping more taxes on citizens
and businesses.
Here’s a question: If those are the highest
priorities, why not cut the lowest priorities from
the state budgets and reallocate that money?
In Washington, Initiative 732 will be on the
ballot. It’s a tax on Washingtonians, pure and
simple. Even the sponsors say the
initiative, if it passes, would raise
gasoline prices 10 to 20 cents.
That’s on top of state and federal
gas prices, which combined are
already 67.8 cents a gallon and
among the highest in the nation.
Opponents estimate the impact
will be even higher, adding 25 cents
to the gasoline and diesel tax burden.
Add that to an estimated 10 percent increase in
the cost of electricity and a 15 percent increase
in the cost of natural gas.
Taken together, that means the cost of farm-
ing, ranching and processing food will increase
in Washington state.
The goal of Initiative 732 is reducing carbon
output in Washington state. OK, what will that do
to our changing climate? No, really. How much,
exactly, will it reduce or reverse climate change?
We don’t see the answers to those
questions anywhere in the pro-Ini-
tiative 732 literature. What we
see is a tax on carbon dioxide,
which is produced by cars, trucks
and factories. It’s also produced
by people. More than 7 million
Washingtonians exhale carbon di-
oxide — 5.9 billion pounds a year.
At $25 a ton, that means under Initiative
732 the people of Washington should be taxed
about $74 million, just for breathing.
Of course, Initiative 732 won’t tax people,
just the businesses that employ them and the
utilities that supply their electricity and their
natural gas. And, of course, those costs will be
passed on to the people, in the form of fewer
jobs and higher prices.
Washingtonians are told they will beneit
from the tax, because the sales tax would be re-
duced. Here’s a thought. Washington legislators
could convene and reduce the sales tax any time
they want. They don’t need an initiative to do it.
The irony of Initiative 732 is its alleged goal
of reducing carbon output. Washington state
businesses have already done just that without
this initiative.
Even more telling is the list of organizations
lining up against Initiative 732.
The Washington State Democratic Party is
against it. So are the Washington State Labor
Council and the state Sierra Club chapter.
So are the Washington Farm Bureau, Wash-
ington State Council of Farmer Cooperatives,
Washington Association of Wheat Growers,
Washington State Tree Fruit Association, Wash-
ington Potato and Onion Association, Washing-
ton State Dairy Federation, and the Washington
Cattlemen’s Association.
Enough said.
Strong dollar challenging
U.S. agricultural industry
O ur V iew
A
Mateusz Perkowski/Capital Press
John Gilmour, owner of a straw-compressing facility near Albany, Ore., won his dispute with neighbors who objected to his business.
When neighbors go to court
A
n Albany, Ore., farmer has
won a legal challenge against
his straw compressing facility
launched by his neighbors and now
wants the plaintiffs to cover his legal
bills.
The neighbors, happy to shell out
money to put him out of business,
didn’t count on losing and having to
pony up for his defense. Pay back, they
say, is a … disappointment.
Farmer John Gilmour operates a
straw compressing facility on a farm
he owns in Linn County. He uses the
facility to prepare 5,000 tons of straw
he produces and 25,000 tons from
other farmers. Compressing straw into
tighter bales makes easier its overseas
shipment.
Gilmour initially applied for a
conditional-use permit from Linn
County, which viewed the operation
as an agricultural processing plant not
covered by the property’s agricultural
zoning. The county granted the permit,
but restricted the hours and days the
facility could operate and regulated the
routes available to trucks servicing the
business.
But Gilmour said the conditions set
out under the county’s permit made his
business less competitive. He appealed
to the Oregon Land Use Board of
Appeals, or LUBA. The board ruled
for Gilmour, holding that compressing
straw or hay into tighter bales is not
“processing,” but instead is a form of
crop preparation allowed on land zoned
for farm use.
LUBA said Gilmour doesn’t need a
permit to operate the facility.
That didn’t sit well with neighbors
of the facility, who weren’t all that
happy that the county had granted it
a conditional-use permit in the irst
place. They say the facility, a relative
newcomer to their rural neighborhood,
takes in as many as 20 semi-trucks a
day on their small road. One resident
complained the neighborhood had
taken on an industrial character.
Backed by two conservation groups,
the neighbors appealed LUBA’s ruling
to the Oregon Court of Appeals. They
argued LUBA should have deferred
to Linn County’s determination that
compressing straw meets the deinition
of processing.
Instead, the court sided with LUBA
and Gilmour. It ruled that straw-
compressing is crop “preparation”
allowed outright on farmland.
“The record relects that the straw
is unchanged in substance from when
it is irst baled in the ield to when it
is packaged for resale,” the appellate
court said.
LUBA and the court are right,
and the rulings provide important
protections for farmers.
Now Gilmour has asked the court
to order his neighbors to pay his legal
fees — $50,911. Sauce for the goose,
but not unexpected when neighborhood
disputes are handled by lawyers and not
by neighbors.
The neighbors’ complaints are
not without merit. Many have lived
peacefully for years on their rural
acreages before Gilmour built his
facility. No doubt its operation has
made their lives less pleasant, perhaps
even more dangerous.
But the zoning that makes possible
their rural acreages makes possible
Gilmour’s business. One of the
consequences of living on farmland for
its aesthetics is having to tolerate actual
farming operations and the legitimate
commercial enterprises they produce.
Readers’ views
Why is Farm Bureau
missing in action?
The last ive years have seen a dra-
matic change in political attitude as it
affects farmland in Clackamas County,
Ore. The election of a new majority of
Clackamas County commissioners four
years ago suddenly put Metro’s Urban
and Rural Reserves process into a state
of chaos. That process was designed to
designate “urban” land for development
and preserve “rural” land over the next
50 years. The saddest part of it all is the
absence of a position by the Farm Bu-
reau.
Speciically, the Tri-County Metro ef-
fort to designate lands as Urban or Rural
Reserves was contested, and one little
area (the so-called Stafford triangle) of
Clackamas County was remanded back
to the county by the Oregon Court of Ap-
peals for resolution.
Sadly, shortly thereafter there was
a signiicant change on the Clackamas
County Commission, and the newly
elected commissioners have been bla-
tantly pro-development and took the op-
portunity to use the remand for leverage.
Enough so that they commissioned their
own consultant to assess the need for
“employment lands,” resulting in a study
that said the county needed employment
lands, and then they started a process of
ighting with Metro about their right to
go back and re-study the Rural Reserves,
while spending over a quarter of a mil-
lion dollars of taxpayer money while
they’re at it!
It’s no surprise that most of those
commissioners received signiicant
campaign contributions from the land
developers who stand to make the most
money from converting this ag land to
commercial use. The net of where we
are now, though, is that the majority of
the commissioners have laid out three
blocks of high quality ag land in the
county that they want to “re-study” in or-
der to convert them from Rural Reserves
to Undesignated (meaning essentially,
unprotected from development). The to-
tal is over 1,600 acres — and that’s in a
griculture is a risky
business. From the time
our ancestors irst be-
gan cultivating crops, farmers
have faced the possibility of
losing their harvests to extreme
weather events.
Whether it’s a hailstorm that
destroys a grain or fruit crop, a
lood that washes out a newly
planted cornield or a drought
that turns grazing lands into a
barren desert, uncooperative
weather can upend the best-laid
plans.
For example, if the end of
this growing season happens to
be extremely wet in some areas
of the country, many commod-
ities could be ruined, affecting
processing, packaging, trans-
portation and other sectors as
well as producers.
Or if natural disasters strike
in other countries, that could put
pressure on U.S. supplies. Or,
longer term, if the drought con-
tinues in California, the state’s
agricultural sector could see a
signiicant shift in the coming
years as farmers attempt to
adapt by changing crops.
Currency risk
And as if these traditional
risks weren’t enough, farmers
also have to deal with the ef-
fects of currency luctuation on
international trade.
Globalism and the terms of
international trade have recent-
ly come under heavy criticism
from both sides of the political
aisle, but there’s no arguing that
international trade is critical to
farmers’ ability to feed the plan-
et’s more than 7 billion inhab-
itants. Even countries that are
capable of producing enough
food to feed their own popula-
tions import many foodstuffs
because people like variety in
their diets.
But although most nations
want access to global markets,
the world economy is complex,
with many variables affecting
a nation’s competitiveness.
One of these variables is the
exchange rate. The contin-
ued strength of the U.S. dollar
against most major currencies
is one of American farmers’ top
concerns at the moment, as it
makes U.S. agricultural exports
more expensive.
Trade impact
county that starts off with over 50 per-
cent of its land base being public (Mount
Hood National Forest), and only 14 per-
cent of the county is land in farms!
So, where is the Farm Bureau? No-
where to be heard. What is most striking
here is the contrast between Oregon and
Washington. As the Capital Press report-
ed in the Aug. 5 edition (Washington
Farm Bureau rips Puget Sound plan),
Tom Davis, the Washington State Farm
Bureau director of government relations,
stated in written testimony that “preserv-
ing farmable ground should be the sin-
gle greatest priority of our state and our
nation.”
What a contrast to the Oregon Farm
Bureau and its County associates who
have chosen to remain silent on the cro-
ny capitalism behind this attempt to lip
1,600 acres of the best farmland in the
country, so a few developers can get rich
putting in industrial or commercial de-
velopments.
Ben Williams
Friends of French Prairie
Aurora, Ore.
In its most recent forecast
for iscal year 2016, the USDA
Economic Research Service
projected that U.S. agricultural
exports would decrease $15.2
billion from 2015, to $124.5
billion, while imports would
increase to a record $114.8 bil-
lion.
These igures still represent
an agricultural trade surplus of
$9.7 billion, but it’s down from
$25.7 billion in 2015 — and
the lowest surplus since 2006.
The productivity of the U.S.
agricultural industry has long
outpaced domestic demand,
creating a trade surplus every
year since 1960.
As a result of the decrease
in exports, national net farm in-
come and net cash income are
both projected to drop this year.
Economists attribute the de-
cline in exports to slower world
economic growth, decreasing
prices for bulk commodities
(world grain stocks are cur-
Guest
comment
Brad Flodin
rently high) and a strong U.S.
dollar.
This creates a complicated
situation for U.S. producers.
At the same time prices are
dropping and demand is slow-
ing due to weak economies
in many countries around the
world, the position of U.S.
farmers’ competitors — pro-
ducers in Canada, Australia and
South America, for example —
are being strengthened by the
exchange rate.
Exchange rate
This puts signiicant pres-
sure on American agriculture.
U.S. commodities are more
than 30 percent costlier than
their Canadian counterparts.
Some purchasers are willing to
pay a premium for top-quality
products, such as U.S. wheat,
but not all products can be
clearly differentiated. After all,
sales of commodities are, by
deinition, driven primarily by
price. Not all farmers are af-
fected in the same way, as dif-
ferent products have different
export markets with different
currencies.
The strong dollar cuts both
ways, of course, also making
imports cheaper. So farmers
who use imported inputs such
as fertilizer or feed will have
lower costs, which does help
the bottom line but, depending
on the crop, usually doesn’t
fully compensate for the lower
sale price of the inal product.
Many producers utilize
commodity contracts, options,
or guidance from brokers to
hedge against some of these
risks, but there are costs associ-
ated with these approaches, so
many producers simply opt to
ride out the cycles.
Strategic plan
If you’re a farmer, a con-
versation with your banker
should be part of your strate-
gic planning process as you
look toward next season. In the
next few weeks, you’ll likely
receive a great deal of infor-
mation about your harvest and
crop yields and will then have a
very short window for making
future plans.
Talk to your banker about
the market for your speciic
commodities and ask him or her
for comparisons of inancials so
you can better understand how
your farm stacks up with others
in the industry.
Also request your banker’s
assessment of your borrowing
capacity, and ask what steps
you should take to increase it
— before you need a loan. Reg-
ular communication allows you
to strengthen your relationship
with your banker and builds
trust on both sides, increasing
the probability that you’ll get
the resources you need when
challenges or opportunities
arise.
Brad Flodin is a vice presi-
dent of Washington Trust Bank.
He earned his inance degree
at the University of Idaho
and is a graduate of Western
Agricultural Credit School at
Washington State University.