Water Act Passage Important to Farmers – DTN
President Barack Obama signed the Water Resources Reform and Development Act, known as WRRDA, in a ceremony early Tuesday.
With more than 60% of farm commodities exported through rivers and ports, agricultural groups often consider WRRDA as much a priority as the farm bill.
The bill cleared the House and Senate this spring with overwhelming support in both chambers. The bill authorizes spending $12.3 billion on 34 water resources projects across the country that have cleared technical reviews by the Army Corps of Engineers. The bill also includes some key overhauls to eliminate a backlog of idle projects and push the Corps to move quicker in studying and approving water-infrastructure projects.
A key reform in the bill shifts funding responsibilities for the Olmsted Lock and Dam, a project on the Ohio River about 17 miles from where the Ohio and Mississippi Rivers meet. Olmsted was authorized during the Reagan administration and expected to cost around $770 million. The project has become a symbol of a federal construction boondoggle with costs now approaching $3 billion and completion tentatively scheduled for 2020.
The WRRDA bill relieves some of the funding for the project from the Inland Waterways Trust Fund with now 85% of project funding expected to come from other federal funds. That should free up another $105 million annually for other inland-waterway projects.
The Brookings Institute noted that the bill also helps reduce the likelihood of Congress raiding the Harbor Maintenance Trust Fund. The fund is in more demand for usage now because of eastern ports trying to deepen their ports to allow for bigger ships that will start moving through a new lock on the Panama Canal slated to open next year.
WRRDA also eliminates as much as $18 billion in planned Army Corps of Engineers projects that have never gotten off the ground. It also is expected to accelerate project planning and development times that have stretched to longer than 15 years in some cases. The Corps would have three years to do feasibility studies and have a $3 million cap on the costs of those studies.
The Army Corps will also get a chance to work in public-private partnerships to fund as many as 15 infrastructure projects.
With WRRDA signed, the National Corn Growers Association also urged Congress to take the next step and approve a proposed increase in the diesel fuel user fee used to fund the Inland Waterways Trust Fund. “By increasing this tax between 6 and 9 cents per gallon of fuel, the industries using the waterways would be able to provide needed funds for the improvement and maintenance of the infrastructure on which they rely,” NCGA stated.
The barge industry has been calling on lawmakers to approve the increase in the diesel tax as a way to fund more lock-and-dam projects, but lawmakers are reluctant to approve any measure that looks like a tax increase.
The Illinois Corn Growers Association said more funding is needed as well, adding that current locks and dams are antiques that must be modernized.
“Illinois corn farmers just cannot understand why Congress does not make building new locks and dams a priority,” said Illinois Corn Growers Association President Gary Hudson. “Farmers and other U.S. industry have the means to increase our exports and build economic activity within the U.S., but we simply cannot export more goods without upgrading our locks and dams. The funding to accomplish these goals will come from a barge user fee that industry supports, but is noticeably absent from this bill.”
WRRDA also makes changes to the Spill Prevention, Control and Countermeasure Rule, or SPCC provision, on fuel taxes. The provision raises the exemption to 6,000 gallons aboveground for farms that have no history of spills. Farms with total aboveground storage between 6,000 gallons and 20,000 gallons also can self-certify their operations if they have not had spills and no single tank on the operation is 10,000 gallons of capacity or more. Those operations that do not meet these exemptions will require a spill containment plan, certified by a professional engineer.
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On November 29, 2016, the Federal Reserve Bank of Chicago will hold a conference to examine the agricultural downturn in the Midwest and discuss future directions for farming. With prices