ANKENY, Iowa (RFD News) — A major ag transportation group says suspending the federal gas tax could offer some relief for farmers as fuel costs remain elevated.
The White House floated the idea earlier this week, raising questions about what it could mean for agriculture and rural America.
Soy Transportation Coalition Executive Director Mike Steenhoek says while the savings may not be massive, they could still help producers facing high transportation costs.
“Throughout this country, you have a federal tax on gasoline, 18.4 cents per gallon, on diesel fuel, 24.4 cents per gallon. And then you have states that have fuel taxes, whether gasoline and diesel. The average gasoline tax in the state is 33 cents. For diesel, it’s 34.76 cents. So if you kind of put that all together, the average American would save about 70 cents a day if we had a suspension of both the federal gasoline tax and state gas taxes. An average farmer would save about $2.70 a day. And so it is savings, but I think it does kind of put it into context of what that savings would actually amount to.”
Most ag operations rely heavily on off-road diesel, which already comes with a reduced tax rate.
Still, Steenhoek says farmers continue feeling the impact of fuel taxes because of the diesel used to transport crops and products on public roads.
“They’re very affected by fuel taxes because of the significant amount of diesel fuel that they do utilize that’s on road to deliver the crops that they grow to its first delivery point. Yes, what they use for their farm machinery is exempt from the fuel tax, which is a significant amount, but they still consume and utilize a lot of diesel fuel that still is subject to that tax.”
The proposal remains under discussion after being floated by the White House earlier this week.
Corey Rosenbusch with The Fertilizer Institute joined us to discuss supply chain disruptions and what farmers should watch as global tensions impact fertilizer markets.
