The writer, of Sidney, Iowa, raises soybeans, corn and cows. He serves as a director on the Iowa Soybean Association and is a supporter of the Iowa Biodiesel Board.
As the rest of the nation enjoys unprecedented economic growth, we in the heartland know farmers are not cashing in. Farm income is down by half compared to five years ago. Crop prices for soybeans continue to hover at multiyear lows. Market instability, trade uncertainty and growing conditions have us between a rock and a hard place.
A viable and thriving biodiesel market is one thing that could provide some much-needed relief. That’s why I’m urging Congress and the Trump administration to make it a priority to restore key federal policies impacting biodiesel.
Upon returning to Washington in September, Congress should renew the biodiesel tax incentive immediately. I thank U.S. Rep. Cindy Axne, D-Iowa, for showing leadership on this front. Although her congressional career is young, she has already stood up as a champion and co-sponsor for the renewal of the biodiesel tax incentive.
The tax credit has now lapsed for more than 20 months, and our biodiesel producers have faced a grueling year and a half of uncertainty. The impact of this is coming home to roost. Six biodiesel plants have shut down nationwide. Many producers are hanging on by their fingernails as this drags on. This is bad for the Midwest.
The biodiesel tax credit has always enjoyed strong bipartisan support because it delivers. When biodiesel producers and distributors can count on the incentive, they grow with confidence — creating jobs, boosting economic growth and contributing to a healthier environment. When they can grow, they buy more soybean oil and other products.
Another critical issue for farmers is the Renewable Fuel Standard. The Environmental Protection Agency’s ongoing actions to undermine the RFS — including the so-called small refinery exemptions — are adding insult to our injury.
The RFS is a vital, value-added domestic market for farmers. By some accounts, EPA is on a path to destroy 2.45 billion gallons of demand for biodiesel and renewable diesel. The 31 exemptions EPA has handed out to oil refiners this month will hurt U.S. soybean farmers by closing yet another market that we rely on. It is likely to further depress the price of our soybeans.
Meanwhile the oil industry is having a very profitable year. The RFS exemptions are another windfall for them at the expense of the biodiesel and renewable diesel industry and U.S. farmers.
We want EPA to finalize a 2020 RFS rule that includes a volume of growth in the biomass-based diesel volumes at least equal to the lost volume caused by these small refinery exemptions. Further, the rule must restore the volumes the courts determined were unlawfully waived in 2016.
Farmers deserve fairness in government policies and an equal chance to enjoy the benefits of economic prosperity. Economic research shows biodiesel production adds 63 cents to the market value of every bushel of soybeans — or about $40 per acre — by generating greater demand for the oil found in each soybean. That’s real money, and we need it now more than ever.
I’m asking every member of Congress to make extending the biodiesel tax incentive a priority when they reconvene in September. And I implore Axne and the entire Iowa delegation to demand that EPA make amends for the RFS volumes lost through exemptions.