2016 Omnibus Shows Successes for Soybean Farmers; Disappointed in Biodiesel Tax Credit

WASHINGTON (December 16, 2015) – Following the release of the FY2016 Omnibus Appropriations bill on Capitol Hill, the American Soybean Association (ASA) is pointing to a series of wins for soybean farmers in the legislation but disappointed in the outcome of the biodiesel tax credit. 

Chief among the accomplishments for ASA in the bill is the repeal of the mandatory country of origin labeling rule, or COOL. The rule has been the subject of criticism from both ASA and the livestock industry that represents the leading consumer of U.S. soybean meal, given the significant potential of the rule to disrupt trade and lead to $1.01 billion in retaliation from Canada and Mexico following the WTO’s finding that the COOL language was discriminatory.

“Soybean farmers are relieved to put COOL behind us,” said ASA President Richard Wilkins, who raises both soybeans and beef cattle in southern Delaware. “This was an issue that impacted both feed grain and oilseed farmers, as well as livestock producers, and we’re happy to see it come to a satisfactory conclusion that avoids retaliation from our valuable trading partners in Canada and Mexico.”

The omnibus continues funding for the Market Access Program and Foreign Market Development (Cooperator) program at current levels of $200 million and $34.5 million, respectively, and additional wins for soybean farmers include increased funding to $350 million for the Agriculture and Food Research Initiative (AFRI), and funding for the McGovern/Dole and Food for Peace development and assistance programs.

The bill addresses conservation by maintaining the Conservation Stewardship Program (CSP), which also helps to fund the Regional Conservation Partnership Programs (RCPP) on which many soy-growing states are already partnering with USDA. One minor negative for ASA on the conservation front was a relatively small reduction in funding for the Environmental Quality Incentives Program (EQIP).

The omnibus also takes concrete steps to address the waterways infrastructure system that farmers depend on to get beans from the farm to the marketplace. Under the Energy & Water section, the omnibus provides significant increases above FY2015 and the President’s 2016 budget request for waterways and ports maintenance and operations, which are priorities for ASA. Specifically, the bill increases funding for the construction, operation and maintenance of projects administered by the Army Corps of Engineers along the Mississippi River and its tributaries and provides $1.25 billion for eligible activities funded by the Harbor Maintenance Trust Fund, which fulfills the agreement enacted in the Water Resources Reform and Development Act (WRRDA) passed in 2014.

“Our transportation infrastructure is a significant advantage for American growers over our competitors in South America, and we are very pleased to see funding specifically designated to address the maintenance and improvement of that infrastructure,” said Wilkins.

Finally, the bill sets aside dedicated funds for USDA disaster assistance programs, which will be of particular use to soybean growers affected by adverse weather events, including those growers suffering significant losses from recent flooding in the Carolinas.

ASA was also disappointed that the omnibus bill failed to address to major issues for soybean growers: GMO labeling and the Waters of the U.S. rule. The bill does not include language that would have defunded the Environmental Protection Agency’s Clean Water Rule, also known as the Waters of the U.S. rule.

The bill does not include ASA-supported language that would have provided two years of preemptive relief from a potential patchwork of state GMO labeling laws, beginning with a law in Vermont set to go into effect in July 2016.

More work to do

A critical priority for ASA within the legislation is a two-year extension of the biodiesel tax credit. The credit is extended for two years (retroactive for 2015 and through 2016), however it remains as a blender’s credit rather than shifting to a producer’s credit as the ASA and biodiesel industry had supported.

“The extension of the biodiesel tax credit is integral to the continued growth and expansion of the biodiesel industry in the U.S.,” said Richard Wilkins, ASA president and a farmer from Greenwood, Del. “We know that the industry can advance and produce beyond its current numbers, but the absence of the tax incentive since late in 2014 has hindered that growth. We’re happy to see it return and look forward to what biodiesel can do over the coming years. At the same time, we’re disappointed that Congress did not take this opportunity to maximize support for domestic biodiesel production by including the provisions passed by the Senate Finance Committee earlier this year to restructure it from a blender’s to a producer’s credit, and we thank Senator Grassley and Congresswoman Noem for their leadership on this issue.”