PASCO – Eastern Washington farmers gave state lawmakers an earful Friday about the rising cost of fuel and urged them to drop the state sales tax on dyed diesel fuel for farm use.
About 100 people turned out for a joint public hearing of two House and two Senate committees at Columbia Basin College to discuss the impact of rising fuel prices on agriculture. Calling the situation dire, about a dozen speakers urged lawmakers to work with Congress to help farmers and to take action themselves – now, before it’s too late for many growers.
As western regional business manager for McGregor Co., a fertilizer retailer, Pat McConnell said his company has done its best to buffer “already battle-weary customers” from rising fuel costs.
“But we can only hold this up for so long,” McConnell said.
LaDon Linde, a dairy farmer in the Yakima Valley, said his fuel costs have increased between $1,500 and $2,000 per month in recent months – and those are only his costs for fuel used on the farm. That doesn’t include the cost to haul grain and hay to feed his herd, or to ship milk from the farm to the processor.
“It starts to add up in a hurry,” Linde said, adding that retailers and others suffer along with farmers from rising costs. “They don’t just hit us, they hit all these other people, the suppliers, the people who rely on us.”
Nationally, farmers were expecting a 25 percent increase in fuel and oil costs – to more than $10 billion this year, according to the U.S. Department of Agriculture. The agency has since revised that number to more than $11 billion since hurricanes Katrina and Rita devastated the Gulf Coast.
Farmers spent $8.2 billion for fuel and oil in 2004.
In addition, the rising prices of fuel for transporting products, which get passed to the producer by shippers and haulers, and the rising price of fertilizer are further denting farmers’ pocketbooks, said Mark Grant, vice president and branch manager of Bank of Whitman in Walla Walla and a wheat grower.
Natural gas, the price of which is also escalating, is used to produce the anhydrous ammonia that is a main component of nitrogen fertilizers.
Farmer after farmer recounted the same concerns.
The state’s potato growers, who ship much of their product out of state to be processed and exported, already are at a competitive disadvantage because of their long distance from population centers, and they can’t afford continued rising costs, said Chris Voigt, executive director of the Washington State Potato Commission.
McConnell said his mother sold a bushel of wheat two weeks ago for $2.92. Minutes later, she paid $2.99 a gallon to fill her car with gas for the drive home.
“The last time gas cost more than a bushel of wheat was in 1932, in the worst of the Depression, when gas was 30 cents and wheat was worth 24 cents,” McConnell said.
Growers urged lawmakers to drop the state sales tax on used farm parts and equipment and to continue funding research and development efforts for alternative fuels. They also asked lawmakers to drop the state sales tax on off-road diesel fuel. Unlike diesel fuel for road use, which is taxed by volume at 31 cents a gallon, off-road diesel fuel is taxed on a fluctuating scale based on the selling price. The higher the price, the higher the tax.
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