Incentives Key To Getting Florida Citrus Growing Again

I’m asked all the time what are growers thinking about the future of the industry? What is the mood out in the groves? My standard answer is, “It depends on who you talk to and who they just got off the phone with.”

Photo by Frank Giles
Photo by Frank Giles

Opinions are across the board. Some growers are pessimistic doom and gloomers; some are generally mystified as to what the future holds and some are relentlessly optimistic and have decided to be “all in” on Florida citrus come heck or high water.

Despite the varying opinions, everyone agrees there will be no Florida citrus industry if we don’t embark collectively on a major replanting effort. Estimates indicate that we need to put 20 million trees in the ground over the next 10 years to maintain our infrastructure.

The problem is that the current economics don’t necessarily give growers a lot of confidence in spending the money to re-plant or establish new groves. The sky-high cost of protecting trees from HLB and the psyllid is a ROI killer.

Consequently, job No. 1 at Florida Citrus Mutual is working to uncover, create, or publicize incentive programs designed to mitigate the risk and give growers a financial nudge and the confidence to plant trees.

We have a couple in the portfolio now, plus a game changer incentive we are on the cusp of getting approved.

Tree Assistance Program

Under the USDA’s Tree Assistance Program (TAP), citrus growers are reimbursed for planting trees lost to HLB. The TAP reimburses a portion of the cost of nursery trees, planting, and land preparation. The main beneficiaries are small- to medium-size growers limited to an adjusted gross income of $900,000. So far, TAP has paid out $6.8 million for an average of $19,800. The TAP has resulted in 1 million trees planted.

Both Coca-Cola and Florida’s Natural have instituted private programs to encourage growers to plant trees. Coke’s is a long-term escalating price floor contract while Florida’s Natural created an interest-free loan program of $10 per tree planted in new acreage. After 10 years of bearing fruit, the loan (1/10 per year) is forgiven. Both programs have been very successful.

Citrus Grove Renovation/Re-establishment Support Program

FDACS recently announced the Citrus Grove Renovation/Re-establishment Support Program. The cost-share program will reimburse growers at 75% of costs with a maximum payout of $250,000. To take part, growers must utilize improved nutrient and irrigation management equipment such as tree microjets/drip lines, variable rate pumps, automation, and soil moisture sensors. Commissioner Adam Putnam, truly one of the industry’s staunchest supporters, did yeoman’s work putting this program together.

Emergency Citrus Disease Response Act

The big project I mentioned earlier is getting the Emergency Citrus Disease Response Act passed and signed into law. Unlike a cost-share or reimbursement program, the measure provides a significant tax incentive to growers who plant trees. Through the Act, growers can immediately expense the cost of planting new citrus instead of the standard 14-year depreciation period under the current IRS rules. It would be available for 10 years.

We believe the tweak to the IRS code will give small, medium, and large growers the opportunity to seek capital from lenders and outside investors to reinvest in Florida citrus. The tax incentive will attract badly needed capital to the industry.

In September, the U.S. House of Representatives overwhelmingly passed the bipartisan measure and we are cautiously optimistic the Senate will pass it and the President will sign it into law.

Florida Department of Citrus economists indicate that individually the aforementioned programs improve ROI by 1% to 3% for a high-density planting. Although not linear, they are additive. For instance, a private program offering floors and rises combined with expensed costs may improve ROI by as much as 3.5%.

With a baseline 6% ROI on a grove, growers can participate in the federal, state, or private programs and boost that ROI to nearly 10%. Now we are talking!
Trust me when I say everything we do at Mutual these days is about pulling the industry through these tough times and preserving our $10.8 billion industry and its 62,000 jobs.

Topics: ,

Leave a Reply

Citrus Stories
Hurricane Matthew satellite image as it brushed past Florida
Citrus
July 20, 2017
Atlantic Hurricane Forecast Taken Up a Notch
Current conditions in the tropics warrant marked revision in potential storm season scenarios. Read More
Sunset on Florida potato field day
Citrus
July 19, 2017
Researchers On a Mission to Find More Places for Growing Produce
Federal grant to aid exploration of food security solutions for the future. Read More
Citrus
July 19, 2017
Farm Labor Stories Making the News This Week
The agricultural labor shortage is strong enough that the consumer press is beginning to report on it regularly. Here are the stories making headlines this month. Read More
farm hacks collage
Citrus
July 19, 2017
Florida Grower Magazine is Seeking Your Farm Hacks
Life hacks are common in social media threads these days. They are those clever ideas or tricks aimed at making Read More
Rain drops on leaf
Citrus
July 14, 2017
Everglades Agricultural Area Farmers Winning at Water Quality
Annual report shows use of best management practices results in another massive reduction in phosphorus flow. Read More
Citrus
July 13, 2017
The Road is Long to Farm Bill 2018 [Opinion]
Participation in this process will be crucial to ensure your needs are understood and addressed. Read More
2015 FFVA Annual Convention crowd
Citrus
July 13, 2017
Trade Talk to Top Florida Fruit & Vegetable Association Convention Agenda
Trade issues are top of mind these days for specialty crop producers. Efforts have been underway since early this year Read More
Citrus
July 12, 2017
Shaky Florida Citrus Season Skids to a Stop
Final USDA tally confirms continuing downward trend of production in the HLB era. Read More
Smaller John Deere tractor for use in citrus screenhouse
Citrus Achievement Award
July 12, 2017
Encourage New Citrus Growth by Getting Back to Basics
2017 Florida Grower Citrus Achievement Award winner Ed Pines says producing crops under protective screen is a way to farm more and stress less. Read More
Beet-armyworms-on-a-tomato-plant
Citrus
July 12, 2017
Tomato Pests Can Be Induced to Cannibalism, New Study Shows
The University of Wisconsin's John Orrock says when beet armyworms are exposed to concentrations of methyl jasmonate, they will abandon eating tomatoes — and start eating one another. Read More
Citrus
July 12, 2017
USDA Pulls 8 Products from Approved Organic Production List
After a few months of speculation, the USDA's Agricultural Marketing Service has published its Sunset 2017 final rule on approved products for organic production and handling. Read More
Drone-aided photo of Ed Pines' CUPS
Varieties & Rootstocks
July 11, 2017
Florida Citrus Growers Going Inside to Think Outside the Box
Producing fruit under protective screen is developing into a viable option for sustaining the Sunshine State’s signature crop. Read More
Carl and Dustin Grooms of Fancy Farms
Business Planning
July 11, 2017
Young Florida Farmers Ready to Take the Reins
As growers age, the next generation is stepping up and stepping into leadership roles on the farm. Read More
Dr. Martha Roberts
Citrus
July 10, 2017
Florida Reveals Its Latest Woman of the Year in Agriculture
2017 award recipient a true trailblazer and champion for the advancement of the state’s farming industry. Read More
Insect & Disease Update
July 10, 2017
Value of Bactericides Under Florida Citrus Sector’s Microscope
Preliminary results of the unique HLB management method indicate many factors left to consider. Read More
The Latest
Citrus
July 23, 2017
USDA Invests $7.6 Million toward Benefic…
Projects to promote beneficial organisms as part of a pest control strategy. Read More
Citrus
July 22, 2017
Representative from Washington Proposes …
Move broadens use of H-2A to all of agriculture to include those with multiple crops and harvests. Read More
Citrus
July 20, 2017
Atlantic Hurricane Forecast Taken Up a N…
Current conditions in the tropics warrant marked revision in potential storm season scenarios. Read More
Citrus
July 19, 2017
Researchers On a Mission to Find More Pl…
Federal grant to aid exploration of food security solutions for the future. Read More
Citrus
July 19, 2017
Farm Labor Stories Making the News This …
The agricultural labor shortage is strong enough that the consumer press is beginning to report on it regularly. Here are the stories making headlines this month. Read More
Citrus
July 19, 2017
Florida Grower Magazine is Seeking Your …
Life hacks are common in social media threads these days. They are those clever ideas or tricks aimed at making Read More
Citrus
July 14, 2017
Everglades Agricultural Area Farmers Win…
Annual report shows use of best management practices results in another massive reduction in phosphorus flow. Read More
Citrus
July 13, 2017
The Road is Long to Farm Bill 2018 [Opin…
Participation in this process will be crucial to ensure your needs are understood and addressed. Read More
Citrus
July 13, 2017
Trade Talk to Top Florida Fruit & Ve…
Trade issues are top of mind these days for specialty crop producers. Efforts have been underway since early this year Read More
Citrus
July 12, 2017
Shaky Florida Citrus Season Skids to a S…
Final USDA tally confirms continuing downward trend of production in the HLB era. Read More
Citrus
July 12, 2017
Tomato Pests Can Be Induced to Cannibali…
The University of Wisconsin's John Orrock says when beet armyworms are exposed to concentrations of methyl jasmonate, they will abandon eating tomatoes — and start eating one another. Read More
Citrus
July 12, 2017
USDA Pulls 8 Products from Approved Orga…
After a few months of speculation, the USDA's Agricultural Marketing Service has published its Sunset 2017 final rule on approved products for organic production and handling. Read More
Business Planning
July 11, 2017
Young Florida Farmers Ready to Take the …
As growers age, the next generation is stepping up and stepping into leadership roles on the farm. Read More
Citrus
July 10, 2017
Florida Reveals Its Latest Woman of the …
2017 award recipient a true trailblazer and champion for the advancement of the state’s farming industry. Read More
Citrus
July 10, 2017
Practical Solutions Are Bringing Precisi…
Growing the budding ag-tech sector to maturity likely will require a deeper meeting of the minds between technologists and agriculturists. Read More
Business Planning
July 10, 2017
Farming for Online Sales Will Require Gr…
Modern agriculture might not be for everyone, but it’s here to stay. Embrace it. Read More
Citrus
July 5, 2017
Florida Struggling to Stay Afloat in Wak…
In one month’s time, parts of the Sunshine State have gone from water shortage warnings to a high-water emergencies. Read More
Citrus
July 5, 2017
Give Tech Companies the Expertise They L…
One problem with many agricultural technology start up companies is that no one on staff has a farming background. That's easy enough to fix. Volunteer your expertise. Read More