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NGF Supports Regs to Reduce Feed Tax by Three Cents
If Approved, Reduction to Save G&F, Ethanol Industry Over $240,000 per Year!
The Nebraska Department of Agriculture (NDA) this week announced plans to hold a public meeting on May 1, 2008 on regulations that, if adopted, would reduce the current 10 cent per ton feed tax paid by elevators, feed mills and ethanol plants to the state feed inspection program by 3 cents, to a total of 7 cents per ton. The proposed reduction would become effective on July 1, 2008 and save Nebraska grain elevators, feed mills and ethanol plants that produce feed and distillers grains over $240,000 per year. The proposed regulation came in the wake of intense industry opposition to a legislative initiative that attempted to permanently shift 2 cents from the feed tax to the noxious weed grant program.
The director of the state Department of Agriculture, has the authority to set the feed tax as high as 15 cents or to reduce the feed tax if revenue in the feed inspection fund is determined to be adequate. Currently, the feed inspection program has a surplus of funds necessary to conduct inspection requirements. This year amid the tightening state budget, the surplus attracted the attention of several lawmakers looking to fund other programs. Much of the surplus has occurred because of the increase in the production of distillers grains, which now accounts for more than half of the 8,000,000 tons of feed taxed in the state each year.
The Agriculture Committee originally proposed LB 862, a bill which would have shifted 2 cents from the current 10 cent per ton feed tax paid by elevators and feed mills to the state feed inspection program, into the noxious weed control program. The Nebraska Grain and Feed Association (NGF) and the Nebraska Cooperative Council (NCC) vigorously opposed those efforts. NGF on principle opposed shifting any fee or tax paid by the industry and designated specifically to support the feed inspection program, to any other unrelated program. NGF argued that there are other funding sources the legislature could examine more applicable to the administration of the noxious weed program.
After considerable compromise, the Agriculture Committee recommended and the Legislature provided for a one time transfer of $200,000 from the commercial feed inspection fund to the noxious weed grant fund on July 1, 2008. NGF stressed that any future surplus in the feed inspection program should go back to elevators and feed mills that pay them.
NGF will work with several senators on the committee during the interim to identify other funding sources that are more applicable to the noxious weed program. Other funding sources that could be considered next session include an increase in the pesticide labeling fee, of which a certain portion already goes to the noxious weed fund.
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Nebraska Grain and Feed Association
1233 Lincoln Mall, Suite 200
Lincoln. NE 68508
Phone: 402-476-6174
Fax: 402-476-3401
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