Agriculture news

Read monopolies

‘Fairness for Farmers’ promises to fight monopolies in ag

Farmers, ranchers, and consumers alike have been closely monitoring consolidation among corporate companies in agriculture. In an effort to fight major consolidation, National Farmers Union launched Fairness for Farmers. This campaign seeks to rally Americans to urge their Congressional leaders and the Biden administration to take concrete steps to curtail consolidation in agriculture, which negatively impacts farmers, ranchers, and consumers.

Rob Larew, NFU President said, “We launched Fairness for Farmers because we have a President who is committed to taking on the challenge of fighting consolidation in agriculture. We are all buoyed by President Joe Biden’s Executive Order on ‘Promoting Competition in the Marketplace’ — a commitment from his Administration to restore fairness to our economy.”

For example, the Executive Order’s fact sheet references the four large meat-packing companies that dominate over 80% of the beef market. “Over the last five years, farmers’ share of the price of beef has dropped by more than a quarter — from 51.5 percent to 37.3 percent — while the price of beef has risen.” The fact sheet continues, “In short, family farmers and ranchers are getting less, consumers are paying more, and the big conglomerates in the middle are taking the difference.”

Fairness for Farmers is a national campaign that seeks to engage farmers and ranchers to fight for an economy that rewards hard work and ensures fair agricultural markets by:

  • Encouraging farmers and ranchers to share videos of their stories online
  • Advertising campaigns, both digital and radio
  • Working with NFU members across the nation to engage local media
  • Building national coalitions to support lawmakers and regulators in the anti-trust space to fight for strengthening our pro-competition laws and regulations
  • Educating lawmakers, the media and the American people about our broken food system that allows monopolies to cheat farmers and ranchers, and charge consumers higher prices at the grocery store

NFU is calling for these solutions:

Larew added, “I do believe we are in for a fight. The giants who dominate our food and agriculture industry are not going to be toppled without a struggle.” He concluded, “But Farmers Union members, and everyone who joined me today, are not afraid of a fight and are ready to stand up for fairness.”

For more information, visit the Fairness for Farmers webpage.

Read safety

5 safety questions families should answer before harvest

It’s a dilemma as old as farming itself — is it safe to have children help their parents on the farm? Farming presents very real dangers to children; in fact, more than 30 children get injured every day in ag-related incidents. But by taking the time to ask a few important safety questions and take proper precautions, farmers can safely involve the younger members of the family in the harvest.

“Harvest is a busy time on the farm, and accidents can happen in seconds,” said Jason Berkland, associate vice president of Risk Management at Nationwide. “Although safety should always be top of mind, farmers should be extra vigilant with safety when family members, children or less-experienced workers are involved.”

As farmers take to fields to work long hours, Nationwide encourages them to ask a few key safety questions to help ensure their farm and family members stay out of harm’s way.

1. Are all hazardous areas of the farm controlled?

Grain handling facilities, for example, have flowing grain, spinning PTO shafts, belt conveyors, augers, and other hazards in play during loading or unloading that can pose great risks to unsuspecting individuals. Other dangerous areas, like pesticide storage areas, manure pits, or other confined spaces should be strictly off limits to anyone without the proper knowledge, training, and personal protective equipment.

“Some regions will also need to make room for a large harvest, requiring bins to be completely cleaned beforehand as well as use of untraditional or alternative grain storage,” said Berkland. “Before anyone enters grain bins, it’s critical to assess for all the hazards involved and to take the proper safety precautions, including using lockout/tagout, harnesses and a spotter.”

2. Are roles age appropriate?

When labor is in short supply and kids are eager to take on new tasks, it can be tempting to send a child, adolescent, or teenager to fulfill a role normally taken on by an adult. Before assigning new roles to youth, ensure they have the needed experience, understanding and protective equipment to handle the task safely.

3. Is equipment shut down with keys removed when not in use?

As tempting as it is to keep keys in trucks and equipment, this can be a safety hazard. Do not leave equipment running and unattended at any time. Remove keys from all equipment when not in use, lower or de-energize any hydraulics, and use safety stops.

4. Will ride-a-longs be safe?

Consider designating a safe and supervised observation area for youth instead of allowing them to ride with you in equipment. In 2020, 60% of the children injured in agriculture accidents were not participating in the work.

5. Are youth not involved in harvest being safe?

With caregiver attention on harvest, ensure that kids old enough to be left at home are being safe. Set expectations, communicate often, and limit temptation by locking up any ATVs, firearms, or other hazards that require adult supervision.

Although there is a lot going on during harvest, safety is at the front of everyone’s mind this season. 

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Read capital gains tax

How proposed capital gains tax changes could affect family farms

Farmers and ranchers have been anxiously watching the development of the American Families Plan. Potential changes in to capital gains tax has been a hot topic since President Joe Biden announced the plan back in April. The proposal would make accumulated gains in asset value subject to capital gains taxation when the asset owner dies.

Under current law, asset value gains can be passed on to heirs without being subject to capital gains taxation because the value of the assets are reset to the fair market value at the time of inheritance. This adjustment in asset valuation, known as a “stepped-up basis,” eliminates capital gains tax liabilities on any gains incurred before the assets were transferred to the heirs.

AFP also included a provision that would exempt from capital gains taxes $1 million in gains for the estates of individuals and $2 million in gains for the estates of married couples, as well as for gains on a personal residence of $250,000 for individuals and $500,000 for married couples.

Gains above these exemption amounts would be subject to tax at death. However, the transfer of a family farm to a family member who continues the operation would not result in a tax upon the death of the principal operator. Under the proposal, any remaining farm and business gains above the exemption amount would receive a “carry-over basis” that effectively defers any capital gains tax until the assets are sold or until the farm is no longer family-owned and operated.

Running the numbers

Using 2019 Agricultural Resource Management Survey data, USDA’s Economic Research Service (ERS) researchers estimated that of the 1.97 million family farms in the United States, 32,174 estates would result from principal operator deaths in 2021.

According to the ERS, the proposal estimated that heirs of 80.7 percent of family farm estates would have no change to their capital gains tax liability upon death of the principal operator. Heirs of 18.2 percent of family farm estates would not owe taxes at the time of the principal operator’s death but could be subject to a future potential capital gains tax obligation on inherited farm gains if the heirs stop farming. In addition, heirs of 1.1 percent of estates would owe tax on nonfarm gains upon death of the principal operator and have a future potential capital gains tax obligation resulting from inherited farm gains if the heirs stop farming. 

Farmer’s reaction

However, according to a Market Intel article from the American Farm Bureau Federation, farmers are still cautious of this analysis from the ERS and the wording of the proposal.

“Other analysts, including many economists, tax practitioners, and the American Farm Bureau Federation, argue that deferred capital gains taxes can have significant implications for a farm, even if it continues to be operated by the family. This is because it’s easy to say that taxes will be deferred, but it’s hard to write that deferral into law in a way that matches intent, and even harder for the farm’s operators to maintain that deferral. There are many ways that ‘continues to be operated by the family’ could go afoul, including how ‘family’ is defined by the IRS versus how USDA defines it, changes to family status, the rules around recapture, and changes to the rules around material participation, just to name a few. So, while the intent of deferring taxes may be good, those deferred taxes can hang over an operation like a dark cloud.”

Data from the Market Intel analysis also addresses the fact that results change significantly as farm size increases. When you look at farm size, 64% of mid-size farms, 77% of large farms and 94% of very large farms would have deferred capital gains tax liability as a result of AFP.

In addition, Farm Bureau’s analysis points out the differences when value of production is considered: 

  • 18.2% of created estates that would not owe capital gains taxes at death but could have deferred tax liability accounted for the vast majority (63.2%) of the value of production of created estates. 
  • The 80.7% of created estates that would not owe capital gains taxes at death accounted for a little over a third (34.6%) of the value of production of created estates.
  • The 1.1% of created estates that would owe capital gains taxes at death only accounted for 2.1% of the value of production of created estates.

Read more of the analysis here.

Read Fairs Rescue Act

Agricultural Fairs Rescue Act aims to provide aid for county fairs

On Tuesday, the House Agriculture Committee unanimously passed the bipartisan Agricultural Fairs Rescue Act. The bill would help fairs across the country recover from the severe financial losses they incurred due to the COVID-19 pandemic.

In 2020, 98 percent percent of agriculture fairs in the United States were cancelled, leading to an estimated $4.5 billion in revenue losses. Introduced by Rep. Jimmy Panetta, the Agricultural Fairs Rescue Act would provide $500 million in federal grants for agricultural fairs through states and state departments of agriculture to help them recover and reopen their operations this year.

“Nearly every fair across the country was cancelled back in 2020 because of the pandemic, and the Delta variant is making it difficult for fairs to be held in 2021. Since fairs are an invaluable way to emphasize our agriculture, educate our families, and bind our community, Congress must ensure that our fairs endure,” Panetta said. “My bipartisan Agricultural Fairs Rescue Act would provide much needed federal funding to help fairs recover and safely reopen. Considering how much our local fairs promote our national agriculture, pump up our economy, and provide lasting memories, it’s Congress’ responsibility to pass this legislation.”

Prior to the pandemic, agricultural fairs generated an average of $4.67 billion per year, supporting thousands of jobs. From March through May of 2020 alone, International Association of Fairs & Expositions members reported a loss of $22 million per month. Along with Rep. Panetta, the Agricultural Fairs Rescue Act was introduced with Reps. Billy Long (R-MO), Mike Levin (D-CA), and Dan Newhouse (R-WA). 

Newhouse said, “Fairs in Central Washington represent the best of rural America and give our communities an opportunity to come together and better understand where our food and fiber come from. Fairs also serve as an economic opportunity for many of our rural communities by supporting thousands of jobs and giving farmers a way to promote their products. This is a step in the right direction for the recovery of our economy, and I am hopeful that we can maintain this momentum to pass this legislation in the House and through the Senate.”

The legislation has been reported to the full House of Representatives, where it must be voted on by all members to pass. 

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