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AGRICULTURE State proposes raising fees on feed, fertilizer



Published: Sat, June 4, 2005 @ 12:00 a.m.



Farmers would be forced to absorb the rising costs.

PEMBERVILLE, Ohio (AP) -- A state proposal to raise taxes on fertilizer and feed would amount to only a few dollars for grain farmer Dale Stickel. That doesn't mean he likes the plan.

"It's the idea that it's another tax," Stickel said. "It's a little here, a little there."

With so much attention focused on proposed cuts in state spending and a higher cigarette tax, few farmers even know that Ohio's two-year budget plan includes 17 new or expanded agriculture fees.

Department's agenda

The Ohio Department of Agriculture expects the fees would generate an extra $3.6 million a year and lessen its dependence on the state's general revenue fund, said department spokeswoman Melanie Wilt.

"When it comes down it, we need to be able to maintain our programs," she said. "The budget is tight, and everybody is coping with cuts."

Money generated by the fees goes back to cover the department's costs of inspecting and verifying the quality of feeds, fertilizers and pesticides sold in Ohio.

The department is proposing to raise the fee on fertilizer from 12 cents per ton to 25 cents. The tax on feed would go from 10 cents per ton to 25 cents.

It adds up

The charges haven't changed since the 1960s, Wilt said.

Among the other proposed fee hikes is an increase on fees for inspecting the estimated 2,500 amusement rides that operate in Ohio and on some inspections in its food safety division. A new $250 charge is proposed on inspections of livestock scales and propane truck meters.

Stickel, who farms about 900 acres of corn, soybeans and wheat, estimates the fertilizer fee hike would set him back about $20 a year.

That's not much, but it adds up when coupled with the skyrocketing prices of nitrogen-based fertilizers and low returns for soybeans and corn.

"It just adds insult to injury," said Bob Rahrig, general manager of Countyline Co-Op, which operates five grain elevators in northwest Ohio.

Other concerns

One reason for the lack of talk about the proposals, Rahrig said, is that farmers are more concerned about other rising costs such as anhydrous ammonia -- a critical component to helping corn develop.

For farmers with cornfields, anhydrous ammonia or another nitrogen-based fertilizer is often their biggest expense. The price has doubled in the last few years to as much as $475 per ton.

The fees, if approved, would be assessed to companies that sell feed and fertilizer. They will be passed along to the customers, Rahrig said. "We operate on an extremely fine margin," he said.

Unlike other businesses, farmers can't pass along the fee increases and must absorb the costs.

"We're in a very unique and unenviable place in the food chain," said Ohio Farmers Union President Joe Logan. "We're at the bottom."

Bureau's priorities

The Ohio Farm Bureau, the state's most influential agriculture group, isn't taking a stand on the fee increases.

Ohio's fees are well below most states and would still be in the middle of the pack if the costs are increased, said Keith Stimpert, a Farm Bureau lobbyist.

In Michigan, a bill expected to be rolled out soon would propose raising the 10 cents a ton fee on fertilizer by a few pennies, said Jim Byrum, president of the Michigan Agri-Business Association.

The association isn't against the idea because the money would go back into supporting the state's oversight of fertilizer, he said.

The Ohio Farm Bureau is more concerned with seeing the state reduce spending and its temporary penny sales tax increase and eliminate taxes that businesses pay on inventory. Both the sales and inventory tax proposals are expected to be approved.

"To some degree that is the key," Stimpert said. "The big picture items."

Higher health care and education expenses and declining tax revenue have contributed to the state's tight budget.

The Ohio Agribusiness Association, which represents fertilizer and feed dealers, supports the agriculture fee increases as long as the money stays within the agriculture department.

Gary King, the group's president, said the association is concerned about a budget proposal that would allow the department director to have more discretion with the money. The director would have the authority to use the money for unexpected emergencies, such as the emergence of a new pest that threatens crops or trees.

King said agriculture director Fred Dailey has assured the group that he would shift the money only in an extreme emergency. "We're going to take him at his word," King said.




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