Governor’s Ag Forum recap

Center pivot sprinklers in the Arikaree River basin to irrigate corn. Each sprinkler is supplied by deep wells drilled into the High Plains aquifer.

From The Sterling Journal-Advocate (Marianne Goodland):

Gov. John Hickenlooper addressed the estimated 350 participants during the Wednesday event, touting his idea for how to fund the state water plan, NAFTA and other trade issues and what he sees as the next big opportunity for economic development in rural communities.

Hickenlooper has twice this month pushed for a statewide ballot measure to restructure the state’s severance tax collection system, a ballot measure that he indicated would come from the General Assembly. Colorado’s severance taxes are the lowest in the region, Hickenlooper told the audience, a situation worsened by a 2016 court decision that forced the state to refund millions of dollars to oil companies for property tax deductions disallowed by the state’s Department of Revenue. The court ruled in favor of oil giant BP in that case, and the state used severance tax revenues as well as other state dollars to pay those refunds.

State severance tax revenues are used to mitigate the impacts of oil and gas activity in rural communities, as well as pay for water projects. But the state has gone from about $150 million in those revenues two years ago to just $25 million last year, and that’s not enough. Hickenlooper hasn’t yet specified how he would want to see the severance tax structure changed. Currently, severance taxes are charged on the volume of oil and gas activity; one idea floated has been to charge something more like a flat tax, similar to how federal mineral lease revenues are collected.

State Sen. Jerry Sonnenberg of Sterling, however, dismissed the governor’s proposal during the ag forum. He said Colorado does not have the lowest severance taxes in the region, and he does not support restructuring the current system.

The forum’s most popular roundtable was on industrial hemp opportunities, which drew dozens interested in learning about the crop. According to one recent study, 19 states now allow hemp production, and Colorado leads the way in the total number of acres planted, at just under 10,000 acres. That represents more than a third of the total acreage in hemp production and half of the hemp produced nationwide. That might not seem like much, but the state only granted growers authority on the plant four years ago, after Congress authorized its production in the last farm bill.

Alex Seleznov is treasurer of the National Hemp Association and runs Pure Hemp Botanicals. He led the session on industrial hemp, cautioning those interested in getting their feet wet to do it slowly, at perhaps two to five acres.

It’s not the crop that will bail out grain growers, at least for now, although some of those who attended the session indicated they would look at hemp as a way of bolstering slumping farm revenues.

Hemp’s opportunities are nearly limitless, Seleznov explained. Its uses range from building materials, known as hempcrete; car parts, fuel and fiber.

Another hot issue at the ag forum: legal and undocumented immigration. A panel of experts on labor issues in agriculture talked about the problems farmers and ranchers face in finding workers in an economy with very low unemployment.

Americans don’t want to do the jobs offered by many farms and ranches, according to the panel, and that’s made many turn to legal immigration and to undocumented workers. But that system has its own share of headaches…

Jon Slutsky, who owns LaLuna Dairy near Fort Collins, started out as a novice in the dairy industry with 64 cows. He and his wife now have more than 1,500 and have gone from just the two of them to 30 employees.

Slutsky was part of a team that produced a white paper on the state of agriculture in Larimer County. The 18-page paper noted that farmers are started to move away from certain labor-intensive crops because they can’t find the labor to maintain and harvest it. Robert (RT) Sakata, who farms 1,600 acres of vegetables, one of the largest vegetable farms in the state, this month announced he would stop growing sweet corn because he could no longer afford the labor costs for that crop. He has also stopped growing broccoli and cauliflower, and told this reporter he would continue to grow onions and grain corn, including on those fields that formerly grew other vegetables. The problem hit him hardest when he looked at the auction brochure for his corn equipment. “I got a lump in my throat” when he looked at the brochure, he said.

Sakata Farms has produced sweet corn for 74 years.

Kelli Griffith is executive director of the Mountain Plains Agricultural Service, a trade association for sheep and cattle herders. “We’ve had to advocate for our members in more political arenas,” Griffith told the audience. That includes the H2A agricultural visa program, which requires those who seek workers to deal with four different federal agencies. The program’s deadlines don’t work well for agriculture, Griffith said, requiring farmers and ranchers to estimate their workforce needs well in advance of growing and harvest season. Such a system leaves no room for changes, whether from drought or other situations, she explained.

The association is looking for relief with the H2A program, Griffith said. The minimum wage requirement for H2A can be higher than the federal minimum wage, because it’s based on the minimum wage in the state where the worker is headed. If it’s a foreign applicant, the farmer or rancher pays for the cost of the visa, travel, food and housing, she said, which allows herders to send home their entire paycheck since they have no living costs. She also noted that while the minimum wage for herders has doubled in the last three years, the number of applicants for those visas has actually dropped. The Larimer County report noted that the current US immigration system provides less than four percent of the workers needed in agriculture.

H2A also requires the employer to attest to the need, requiring proof that no American wants that job. If the labor need changes, the employer has to commit to paying the worker at least three-quarters of the contract, regardless of how early it ends.

The solution, at least to some, is automation. “It can’t happen fast enough,” Sakata told this reporter.

The ag forum is led by the Colorado Agricultural Leadership Program; Sonnenberg, a graduate of the program, is the board chair.

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