 LEGISLATIVE BULLETIN – February 24, 2005 HB 1518,
the bill increasing the wheat checkoff from one cent to 1.5 cents per
bushel, will have hearing on Friday February 25 before the Senate
Ag Committee in the Brynhild Haugland Room of the State Capitol in
Bismarck. This large room
is being used because a small part of this bill is controversial and
many farmers are expected to attend.
The same room was pretty full on February 4 when the House Ag
Committee heard the bill. This
idea for a checkoff increase got going as a method of the Wheat
Commission paying off its $2-$3 million debt of attorney fees in the
Canadian trade case. The
Commission says this case has returned tens of millions of dollars to
North Dakota wheat producers and will continue to for a few more years. The following bill language has become controversial:
“The commission shall
expend an amount at least equal to that raised by two mills of the levy
provided for in this section to contract for activities related to
domestic wheat policy issues, wheat production, promotion, and sales.
The contracts may be with no more than two trade associations that are
incorporated in this state and which have as their primary purpose the
representation of wheat producers.” The “two trade
associations” are intended to be the North Dakota Grain Growers
Association and the U.S. Durum Growers Association.
Each mill of levy raises approximately $280,000 per year gross,
and so two mills is $560,000. The North Dakota Farmers
Union is strongly opposed to its members’ checkoff dollars going to
grower groups that it says often take positions with which FU disagrees. NDFU wants the “shall” in the controversial language
changed to “may” so the Wheat Commission would still have control.
Like most commodity-specific grower groups, Grain Growers and
Durum Growers are smaller than general farm organizations like FU and
Farm Bureau, but, they say, more tightly focused.
They emphasize their work on issues like enhancing crop insurance
and the quality loss adjustment program. Last session the NDFU
was poised to recommend that its members seek wheat checkoff refunds if
the bill shifting wheat checkoff funds to the grower groups became law. FU hasn’t said that this year, but judging from the passion
of opposition testimony at the House hearing, some will no doubt seek
refunds if the bill is enacted as is.
Refunding and the two-mill shift to grower groups would cut into
gains the Wheat Commission would otherwise have to retire the trade case
debt. Refunders would get
back both the 13 mills from the Commission and the two mills from the
grower groups. The NDFU
also wants the increase to expire once the trade case debt is paid.
The levy would then return to the present one cent per bushel. Grain elevators have
somewhat of a stake in the Wheat Commission.
First of all, grain elevators have been collecting those checkoff
dollars for the Wheat Commission since 1959.
Grain elevators often host trade teams brought in by the Wheat
Commission. Successful
market development and promotion programs of the Wheat Commission that
help to increase domestic and/or foreign demand for North Dakota wheat
and durum mean more grain volume for grain elevators. ND Grain Dealers Association has not gotten
involved in this legislation thus far.
This fax is provided for information.
Members who have an opinion to express to the legislature on this
matter should contact members of the Senate Ag Committee.
See the list in the back of the Lawmakers Book sent out in early
January. After Senate Ag
acts on the bill it will go to the Senate floor for attention by all
State Senators. SB 2405 is
our bill on FELA liability. It
is scheduled for hearing in House Transportation on Friday March 4. Please contact members of that committee in support.
See SB 2405 Testimonies on FELA at www.ndgda.org
for reasons why. RAILROAD FUEL
SURCHARGES
The BNSF letter says
fuel price increases negatively impact BNSF earnings.
Increased fuel prices have impacted all fuel users, and many
can’t surcharge to recoup the cost.
In the 4th quarter of 2004, when its fuel surcharge
reached its peak of 9%, the BNSF reported all-time record earnings,
all-time record freight revenues, and all-time record operating income.
See http://www.bnsf.com/news/articles/2005/01/2005_01_25a.html?index=/news/index.html BNSF says in the letter
that it does not collect more in fuel surcharges than its incremental
fuel expense. A study
undertaken by the National Grain and Feed Association, the National
Industrial Transportation League and others, regarding fuel surcharges
of five major railroads states: “...with
limited exceptions, the surcharge programs of the five carriers
consistently result in over-recovery of fuel cost increases on an
individual movement basis.” Using BNSF’s own
numbers, it can be shown that the BNSF fuel surcharge pays for the
entire cost of fuel consumed on some North Dakota grain shipments. BNSF says fuel coverage from surcharges is coming
from only about 50% of its revenue base.
Ag products shippers are among the 50% paying.
They had nothing to do with BNSF not collecting from the rest of
its revenue base. Surely
the 50% should not be expected to pay the fuel price increases for the
100%. The North Dakota
legislative bill seeking to require that fuel surcharges be related to
length of haul is HB 1370.
It passed the House 91-0 last week.
Senate hearing date is also Friday March 4.
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