Over the past two years, Oregon farmers and the Oregon Department of Energy have used Oregon's Business Energy Tax Credit to support a type of farm equipment that offers huge energy savings-no-till drills.
The Oregon Business Energy Tax Credit Program provides a 35 percent tax credit for a variety of on-farm energy efficiency projects, such as lighting upgrades, irrigation pump efficiency improvements, and greenhouse heating efficiency upgrades. Most projects must save at least 10 percent of the energy used in an industrial process, and lighting projects must save at least 25 percent.
Recently, farmers began to wonder if the credit could be used for no-till drills because of the fuel savings associated with converting from a conventional to no-till cropping system. Harrisburg-based Malpass Farms was the first to submit an application.
"With the reduction of field burning in the Willamette Valley, and very high fuel and fertilizer costs, we had been actively looking for new ways to farm the ground with stubble remaining in the field," explains Jane DeWall with Malpass Farms in Harrisburg.
Jane's son Matt adds, "Even though it was the first no-till application, we were hopeful we would qualify when we figured the savings in fuel alone." Matt and Jane DeWall worked with their John Deere representative and the Oregon Department of Agriculture to prepare the application, which included calculations of the fuel that would be saved by converting to a no-till cropping system.
The Oregon Department of Energy determined that no-till drills were indeed eligible for the credit because they allow growers to achieve huge reductions in diesel fuel consumption. "The applications we've received for no-till drills have demonstrated fuel savings above and beyond the 10 percent savings criteria," explains Matt Hale with the Oregon Department of Energy. "No-till and reduced-till conversions allow growers to reduce their trips across the field, and their diesel fuel consumption, by half or even more."
Hale has worked closely with each applicant as part of the application review process to ensure the department receives the information it needs to issue the credit. "The Nebraska Tractor Test Laboratory conducts tests on tractors' fuel consumption and the test results are readily available," explains Hale.
"Growers and their sales representatives can use these test results to calculate their existing fuel consumption and future fuel consumption under a no-till conversion. This shows us the amount of energy they'll save as part of the drill purchase."
Smith Bros. Farms in Shedd learned about the credit from Malpass Farms just as they were preparing to convert about 2,500 acres of annual ryegrass fields to no-till. They received a Business Energy Tax Credit for the no-till drill and used it during the 2010 planting season.
"It turned out just the way we thought," says Spence Smith of the equipment's performance. "The fuel saving numbers panned out with the way that we ran them. It was exciting to see that it wasn't just numbers and that it turned out that way." Smith Bros. Farms also received a credit for straw chopping attachments on two combines because the choppers eliminated the need for separate trips across the field to flail mow grass straw. "The choppers got the straw really fine, so we were able to plant right into it," says Smith. " The no-till drill, and the two combines we have with the chopping attachment, went hand in hand."
In addition to fuel savings, no-till and reduced-till cropping systems offer a variety of soil health and environmental benefits. "It's probably the best way to get your soil tilth up in shape by being able to leave the straw on there," explains Spence Smith.
Malpass Farms reports the seeder has helped assure completion of planting within their desired time frame. "We feel timing is very important in the planting season," explains Matt DeWall. "This large system saves time loading and planting, as well as fuel. The first year we purchased the system, we quadrupled our wheat acres. It was a blessing to have this system to assure the completion of the planting."
Yet converting from a conventional to no-till cropping system can be challenging and stressful. "There is a significant amount of risk for growers to go to a no-till system in a grass seed operation, with slugs, seed establishment, and insects," explains Jane DeWall. The Business Energy Tax Credit has helped support no-till conversions by offsetting part of the potential cost of the conversion to the grower.
"The credit made it feasible to implement a no-till system, given the way machinery costs nowadays," says Spence Smith with Smith Bros. Farms.
"With the weak economy and demands for new and different crops, we have actually replanted triple what we had originally figured and this system has helped make that possible," says Matt DeWall. "We don't know how we would have made it without this system or the help of this Business Energy Tax Credit."
Hubbard farmer Allen Chapman received a Business Energy Tax Credit this fall for a no-till drill. He used the drill to seed 238 acres of wheat and 50 acres of clover on his own farmland, and also did some custom work for other area farmers. "Planting season was stressful this year, but I'm happy with how it turned out," he says. "One field looks a little weak, but we just planted it. The rest looks beautiful. The clover couldn't be coming up any better."
Growers must apply for the credit prior to placing an order on a drill. The Energy Conservation tax credit application is available on the Oregon Department of Energy's website. Oregon Department of Agriculture has assisted several growers and equipment dealers to locate Nebraska tractor test data and calculate the energy savings data that must be submitted with the application.
If the application is complete and determined to be eligible for the credit, the grower will receive a preliminary certificate from the Oregon Department of Energy. After the applicant receives and uses the equipment, they submit additional documentation to the department, then receive a final certificate with a tax credit amount. Most credits are taken over a five-year period and can be carried forward for up to three years beyond the five-year period. If the eligible project costs are less than $20,000, the credit can be taken in one year.
The department has also issued Business Energy Tax Credits for certain other technologies that can help farmers save fuel. Several farmers have received credits for adding Global Positioning Systems to their tractors because of the reduced overlap during tillage.
While applications for Business Energy Tax Credits for renewable energy projects are currently limited to certain application periods and subject to a cap, energy conservation applications for no-till drills and other energy saving projects are accepted at any time. The credit is currently scheduled to expire on July 1, 2012.
For more information about the credit, visit the Oregon Department of Energy website,http://oregon.gov/ENERGY or contact Stephanie Page with the Oregon Department of Agriculture at 503-986-4565.
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