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Bill reallocating Illinois fertilizer fees seen as ‘win-win’ by farm industry, environmental groups

by Carolyn Orr ~ July/August 2012 ~ Stateline Midwest »
Thanks in part to a joint effort between key environmental and agricultural groups, as well as legislative leaders and state agencies, the state of Illinois is set to boost funding for agriculture research and water quality, while also providing a sustainable revenue resource for the regulatory efforts of its Department of Agriculture.
HB 5539 was passed by the legislature in May even as the state grappled with an immensely difficult budget situation for fiscal year 2013. (The bill had not yet been signed into law as of late June.)
Illinois Democratic Sen. Michael Frerichs, chair of the Senate Agriculture Committee, says the measure marks the first update of the Illinois Fertilizer Act since 1961.
“This legislation is possible because of the tenacity of a lot of groups working together over a couple of years,” he says. “I am confident that it will produce better water quality in our rivers and streams, and make our producers more productive by keeping more of the nutrients for the crop.”
Jean Payne, president of the Illinois Fertilizer and Chemical Association, says the changes in how revenues from the state’s fertilizer fee are used will have broad benefits — as seen in the fact that the agricultural industry and the Sierra Club backed the bill.
Such fees are in place nationwide, and as the accompanying chart shows, they vary widely in the Midwest from state to state. In Illinois, distributors had paid a fee of 25 cents per ton of commercial fertilizer. This fee was intended to cover the cost of regulation and testing, but the revenue was instead being diverted to Illinois’ general fund.
That will change if HB 5539 is signed into law.
First, the fee will be raised to 50 cents per ton. Second, all fertilizer distributors will be licensed by the state Department of Agriculture under a newly streamlined system (custom-blending licenses were eliminated, and a single class of licenses was created). Third, half of the revenue from the 50-cent fee will go directly to the department to cover the inspection and regulation program.
The other half of fee revenue will allow the state’s agriculture community to invest in the “4Rs” of nutrient management — “farmers choosing the right fertilizer, applied at the right rate, at the right place, at the right time,” says Kathy Mathers of The Fertilizer Institute, the trade association of the fertilizer industry that initiated the nationwide 4R Nutrient Stewardship System.
A newly created private entity in Illinois, the Nutrient Research and Education Council, will manage the research efforts featured in the 4R program.
Under HB 5539, the council will set the fees needed for this effort, based upon industry needs, but they must be between 50 cents per ton and $3. The council’s goal will be to reduce nutrient losses into Illinois waters; it will fund research, conduct on-farm trials and share best-management practices. According to Mathers, Illinois is the first state to have developed a private-public partnership like this, but it will work similarly to existing commodity check-off programs.

 

Carolyn Orr serves as CSG Midwest staff liaison to the Midwestern Legislative Conference Agriculture and Natural Resources Committee. The committee’s co-chairs are North Dakota Sen. Tim Flakoll and Kansas Sen. Carolyn McGinn.