Kansas Agriculture Secretary Josh Svaty didn’t have any easy answers for farmers March 3 when they gathered to hear the latest news in the agriculture world.
With the state trying to manage a $100 million revenue deficit and more cuts on the way, what’s left?
“Laying off people may not help,” he said.
To begin with, the department is required to give employees 45 days notice of a layoff and the state’s budget year is more than half over, ending June 30.
“We wouldn’t save that much,” Svaty said, “and we don’t have any employees to spare.”
When some state departments were doing furloughs in November, the department of agriculture did not but may consider them toward the end of the fiscal year.
“If lab personnel only work part of the week, the testing cannot be completed,” he said.
Same way with meat and poultry processing operations where inspectors are required to be on site.
“Budget solutions are complicated,” Svaty said.
But there is a silver lining in all this.
“Agriculture continues to be the workhorse for the state,” he said. “Agriculture holds steady even in bad years. It is still bedrock, providing an abundance of jobs.
“This is a cool time to be involved,” the secretary said.
Talk shifted to the surplus of wheat.
Are transportation issues to blame for wheat being stored on the ground?
“There is too much wheat in the bins,” Svaty said. “There is a need for the ability of rail to move the grain.”
He cited limited access to short line rail as part of the problem.
“Rail still is the most effective way to move grain across the country,” Svaty said.
New water law proposed
Ag producers may have more options regarding water rights. The Kansas Water Law, also known as “Use it or lose it,” was requiring landowners with water rights to use the water or the producers could lose their rights to the water.
The program was suspended last fall and officials are looking at conservation usage.
“Abandonment is available but no one is doing it,” Svaty said. “A lot of people are pumping occasionally to avoid the abandonment issue.”
This change could aid water conservation efforts and it would be voluntary.
Manufacturing and the economy
Manufacturing production has waned during this economic downswing, Svaty said. The highest unemployment rate is in those areas of the state with manufacturing — especially aircraft.
“Most rural areas are not as affected,” he said, with some businesses needed to fill open positions.
This situation is not unique to Kansas.
Before the economy took a dive, aircraft manufacturers had orders — some even with backorders — for corporate jets and the like.
“A private company jet became the image of corporate excess,” Svaty said. “It will take a while for Wichita to rebound.”
Trading with other countries
Later in the meeting, representatives of U.S. Rep. Jerry Moran and U.S. Sen. Pat Roberts presented information.
Moran’s district representative Mike Zamrzla said Moran introduced legislature that would enhance trade to Cuba. The U.S. does some trading with Cuba but there are restrictions.
“Cuba would be able to purchase grain and livestock and pay for the products when they arrive instead of when it leaves the port,” Zamrzla said.
This also would allow direct payments to U.S. banks instead of going through a third party.
There are several trade agreements pending with South Korea, Panama, and Columbia.
Moran also introduced legislation to roll back regulations put in place by the U.S. Environmental Protection Agency.
“The EPA does not have the right to regulate greenhouse gases,” Zamrzla said. “Congressman Moran believes the EPA does not make regulations based on sound science.”
Another concern of Moran’s is the estate tax.
In 2010, Kansas residents are not required to pay an estate tax. However, when the year ends, residents will have to pay. Moran would like the state’s estate tax to be eliminated but if that’s not possible, the next best option would be to increase the exemption exclusion from $1 million to $3.5 million.
More cuts will probably be proposed when the 2012 Farm Bill is reviewed. Discussion of the bill will begin in the coming months.
“Ag programs have been cut in half,” Zamrzla said. “There seems to be a lot of effort to do a lot of damage to agriculture.
Mel Thompson, Roberts’ agriculture representative, said efforts are being made to put clamps on animal production.
A question on a Missouri ballot regarding “puppy mills” is a “backdoor attempt at affecting animal producers,” Thompson said.
He said Roberts would like to see more crop products sold to other countries.
Another concern is Social Security benefits.
“Right now we’re paying out more in benefits than we’re collecting in revenue,” Thompson said.
Legislators are proposing taking $465 billion out of Medicare, which will drastically affect rural hospitals and senior citizens.
“Some folks propose we take a look at Medicare and Social Security reform rather than health care reform,” Thompson said.