TheFirstFurrow

Monday, April 2, 2018 A Closer Look at Taxes: 5 Questions with AFBF’s Pat Wolff

April is here, and with it comes warmer weather, spring break vacations, . . . and taxes. Yes, we hate to bring it up but Tax Day is just around the corner — April 17th to be exact — so we thought we’d look a little closer at some of the finer points of the tax reform law that Congress passed a few months ago. We’ve fired a handful of questions to Pat Wolff, Senior Director of Congressional Relations for American Farm Bureau Federation, and she’s given us the inside scoop on what’s new with taxes and what’s on the horizon.

Question #1: The Tax Cuts and Jobs Act is a comprehensive law, making changes to the nation’s tax policies that impact practically every individual and business in the US. Which provisions do you think are most important for North Carolina farmers and how does this reform package help them going forward?

The cornerstone of tax reform is lower tax rates for individuals and businesses. For farmers that means being about to keep more of their money to reinvest in their operations. Farms that pass profits through to their owners for taxation (sole-proprietorships, partnerships and under Subchapter S) will be taxed from zero to 37 percent with that top rate kicking in at $600,000 of income. That’s compared to the old law where the top rate of 39 percent used to start when income exceeded $470,000. The top corporate tax rate permanently shrinks from 35 percent to 21 percent.

Expanded deductions will allow farmers to write off more of their expenses immediately. This will make it easier to reduce taxable income by matching income with offsetting expenses. Section 179 small business expensing is permanently doubled to $1 million. There are no limits on bonus depreciation. And almost all farm businesses get to keep using cash accounting and deduct their interest expenses and property taxes.

Question #2: The reduction in the corporate tax rate has gotten a lot of attention, but the majority of North Carolina farms are family-owned sole proprietorships and partnerships. Are there any provisions in the new tax law that will help family-owned sole proprietorships and partnerships?

Tax reform provides a new business deduction that is available only to sole-proprietorships, partnerships and those that pay taxes under Subchapter S. Individuals operating pass-through businesses will be able to take a tax deduction equal to 20 percent of net farm income with limitations if taxable income exceeds $315,000 for a couple.

Question #3: Considering that most farms have little liquidity and their capital is usually tied up in the land and farm equipment, why was it important that Congress expand the estate tax exemption level?
Tuesday, March 13, 2018 Stepping Up for Agriculture

The following commentary is by North Carolina Farm Bureau President Larry Wooten, first published in the Spring 2018 issue of NC Field and Family.

Farm Bureau takes a stand on important issues

For more than 80 years, our Farm Bureau brand has served as a trusted voice on issues impacting the agriculture community. We must remain vigilant concerning the issues and challenges ahead of us in 2018.

Legislatively, we have a strong working relationship with the North Carolina General Assembly and the Governor’s office. We might not always agree on every issue, but I can tell you, they always want to hear from us. The same is true for our U.S. congressional members. We have great relationships with all 13 congressional offices and our 2 senatorial offices. This is a testimony to the strength of this organization and our grassroots leadership.

As the largest and most influential voice for rural North Carolina, we must not be afraid to take big, bold, and active stands on the controversial issues impacting our members. We must be prepared to stand alone if necessary. Our membership and the agriculture community expect Farm Bureau to do what is in the best interests of our farmers, regardless of the consequences.

Thursday, February 1, 2018 Atlantic Coast Pipeline Takes Another Step Forward in North Carolina

On January 26th, the North Carolina Department of Environmental Quality issued one of the final critical permits needed to begin construction of the Atlantic Coast Pipeline (ACP).

Responding to the news, North Carolina Farm Bureau President Larry Wooten said, “North Carolina Farm Bureau and our state’s farmers applaud and thank Governor [Roy] Cooper and his administration for approving the permits that will allow the Atlantic Coast Pipeline to move forward. We believe, and our farmers across the state believe, that natural gas in rural North Carolina is important for advancing our number one industry and certainly it’s important for economic development in rural North Carolina.”

 

What is the Atlantic Coast Pipeline (ACP)?
Put simply, the ACP will help deliver natural gas to rural North Carolina. The new pipeline will link North Carolina to the abundant natural gas supplies of the Marcellus and Utica shale regions in the northeast. Traveling approximately 600 miles, the pipeline will move up to 1.5 billion cubic feet of natural gas per day. While most of that supply will used for electricity generation, there is sufficient volume to enable local natural gas distribution companies to expand their system to meet the demands of farmers and help drive rural economic development projects.

KEY ACP INFO

  • 600 miles from West Virginia, thru Virginia, ending in Robeson County, NC
  • Provides 1.5 billion cubic feet per day of natural gas
  • 36-inch diameter pipe in NC
  • Expected to provide $7.7 million in local property tax revenues in NC
  • Possibility of $134 million in annual energy cost savings in NC

Why the ACP is good for Agriculture?
As we have discussed before, rural infrastructure initiatives are critical to the success of our rural economy. This is exactly the intent of the ACP – to boost our rural economy. While boosting our rural economies, the availability of natural gas is a key component to growing the State’s largest industry – Agriculture. This is a win-win situation.

Before the pipeline has even been built, the ACP partners are already meeting with farmers to discuss viable areas to extend natural gas to their farms. Access to natural gas provides farmers lower input costs and less price volatility. It’s also a critical component to siting NEW economic development projects. Currently, North Carolina is served by a single interstate pipeline delivering natural gas from the Gulf of Mexico. Adding additional supply from another region of the country provides diversity and competition, leading to the needed lower costs and price volatility. As the state’s largest general agricultural non-profit, a win for North Carolina’s rural economy and our farmers are great reasons to support this economic development project.

The Bottom Line.
North Carolina’s economic development infrastructure is reliant on a modern energy policy that promotes affordable and reliable energy production and delivery while protecting our farmers, landowners, and natural resources. We look forward to the ACP providing a key component to the infrastructure needed to grow our State’s largest industry and fuel rural economic development.

Read the ACP Factsheet on Agriculture

Wednesday, January 24, 2018 The Newest Chapter in the Ongoing Saga of the 2015 WOTUS Rule

It’s no secret that farmers nationwide oppose the Obama Administration’s 2015 Waters of the U.S. (WOTUS) Rule. As we’ve written here before, the 2015 Rule would significantly expand the area where the federal government has the authority to regulate water. Why? Because under the 2015 Rule many tracts of land would become newly regulated “waters,” even land that is only wet for a couple of hours after it rains.

If implemented, farmers would have to apply for costly federal government permits to engage in even the most basic farming practices on these lands. And there is no guarantee that those permits would be approved. Accordingly, numerous federal lawsuits were filed in 2015, including one brought by American Farm Bureau, in the hopes of stopping the WOTUS Rule.

On Monday, the Supreme Court of the U.S. (SCOTUS) once again waded into the WOTUS Rule waters, issuing an opinion in one of those lawsuits, National Association of Manufacturers v. Department of Defense (NAM). The Court’s decision wasn’t a blockbuster (or a page turner, for that matter). It merely stated that opponents of the Rule had to file their legal challenges in the federal district courts, not the federal appellate courts. That’s the result the opponents of the Rule were hoping for. So, let’s call it a narrow win for farmers and other landowners.

But, ironically, the Court’s decision may be a double-edged sword. To explain why, we’ve got to look back at those 2015 lawsuits we mentioned above.

Remember that, until Monday, opponents of the WOTUS Rule weren’t exactly sure where to file their lawsuits. Should they file in federal district court or federal appellate court? To hedge their bets, multiple lawsuits were filed in both courts. Of the cases filed in federal district court, most were dismissed by federal trial judges who said they didn’t have authority to hear the challenges because the cases should have been—wait for it—filed in the federal appellate courts! But a district court judge in North Dakota said otherwise and blocked the 2015 Rule from taking effect. However, that ruling only applied to 13 states: Alaska, Arizona, Arkansas, Colorado, Idaho, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, South Dakota, and Wyoming. Therefore, North Carolina farmers were not protected by the judge’s order.

KEY POINTS

  • SCOTUS ruled legal challenges to the WOTUS Rule must be filed in federal district courts, not federal appellate courts—a narrow win for NC farmers.
  • But the ruling currently blocking the WOTUS Rule from taking effect nationwide was issued by a federal appellate court.
  • Since SCOTUS just ruled that appellate courts don’t have jurisdiction to hear legal challenges to the WOTUS Rule, the nationwide stay issued by the appellate court will go away soon.
  • The Trump Administration is attempting to delay, rescind and replace the WOTUS Rule.
  • Congress could also pass legislation to help the Administration block the Rule.
  • But these efforts are almost certain to be challenged in court.
  • There’s a risk the WOTUS Rule may be in effect in NC sometime in late February or March 2018.

Meanwhile, the cases filed in the federal appellate courts were consolidated in the Sixth Circuit, U.S. Court of Appeals. The Sixth Circuit ultimately blocked the Rule from taking effect while it wrestled with the procedural question that SCOTUS answered earlier in the week. Unlike the North Dakota decision, the Sixth Circuit’s order took effect nationwide and it has been in effect since October 2015. As a result, North Carolina farmers haven’t had to comply with the 2015 Rule.

But the nationwide order blocking implementation of the 2015 Rule will go away soon. That’s because, at the end of its Monday opinion, SCOTUS sent the NAM case back to Sixth Circuit, directing it to dismiss the all of the cases challenging the rule. If the Sixth Circuit doesn’t have the power to hear those cases, it can’t continue to block the WOTUS Rule. The process of sending NAM back to the Sixth Circuit will take a little over thirty days. So sometime in late February the national stay that has protected North Carolina farmers from the 2015 Rule will evaporate.

Wednesday, January 17, 2018 ICYMI: Trump Promotes Rural Development Initiative in Speech to Farm Bureau Members

Via American Farm Bureau Federation

On January 8 President Donald Trump unveiled a major initiative designed to strengthen a rural economy that has lagged urban areas in recovery from the Great Recession of 2007-2008. Trump signed two executive orders that fund and streamline the expansion of rural broadband access after an address to 7,400 farmers and ranchers gathered at American Farm Bureau Federation’s 2018 Annual Convention.

In addition to economic development, Trump touched on issues of particular importance to agriculturists such as regulations, labor and trade. He praised farmers for their enduring values. “We are witnessing a new era of patriotism, prosperity and pride—and at the forefront of this exciting new chapter is the great American farmer.” Farmers, Trump said, “embody the values of hard work, grit, self-reliance and sheer determination.”

The president spent much of his address decrying the costs of excessive regulation and tallying the rules his administration has moved to eliminate.

“We are also putting an end to the regulatory assault on your way of life. And it was an assault,” he said. Trump singled out the Waters of the United States rule, now being withdrawn following an executive order he signed in the first weeks of his administration. “It sounds so nice, it sounds so innocent, and it was a disaster. People came to me about it and they were crying – men who were tough and strong, women who were tough and strong – because I gave them back their property and I gave them back their farms. We ditched the rule.”

Trump acknowledged controversy over the North American Free Trade Agreement and other trade agreements that account for roughly a quarter of U.S. agriculture revenues. “To level the playing field for all of our farmers and ranchers as well as our manufacturers we are reviewing all of our trade agreements,” he said. “On NAFTA I am working very hard to get a better deal for our farmers and ranchers and manufacturers.”

Trump promised the farm bill would continue to lend stability to farmers who are now entering their fifth year of declining incomes. “I look forward to working with Congress to pass the farm bill on time so that it delivers for all of you, and I support a bill that includes crop insurance,” he said.

President Trump Addresses Convention

AFBF President Zippy Duvall said Trump’s visit marked a watershed in D.C. politics.

“Farmers and ranchers have too long faced burdensome regulations,” Duvall said. “This president understands the toll government overreach has taken on ordinary business and is moving swiftly to clear the way for prosperity. We are moving into yet another year of economic difficulty. Relief could not have come at a better time.”

Wednesday, January 10, 2018 Principles For Progress

The following commentary is by North Carolina Farm Bureau President Larry Wooten, first published in the Winter 2017-18 issue of NC Field and Family.

Mergers showcase the need for competitive choice

Progress has been a guiding principle of farming since before North Carolina’s first Commissioner of Agriculture Leonidas L. Polk established Progressive Farmer magazine in 1887, after serving in office.

With each new season of the year, it seems there is also a huge new merger or acquisition being announced in the name of progress. With the dizzying pace of consolidation in agribusiness, it seems appropriate to consider both sides of this double-edged sword. Is consolidation beneficial to farmers and consumers? Or do these legal strategies lessen competition to the point where too many options vanish?

According to industry analysts, these deals may result in increased efficiencies, crop yields and time savings, so we’re typically told this merger or that acquisition is ultimately for the benefit of farmers and consumers. Yet, is consolidation the only way, and the best way, to achieve progress?

What makes our economy prosperous? Is the answer independent, strong small businesses? Or, is it the consolidation of large corporations? Like most things in life, the truth is usually somewhere in the middle. Ideally, we’d like everyone to be prosperous. But one thing is certain: Farmers and consumers need choice!

Wednesday, November 29, 2017 NCFB’s 82nd Annual Convention

In a few days, North Carolina Farm Bureau members and voting delegates will travel to Greensboro, NC for the organization’s 82nd Annual Convention. The event is a celebration of the year’s work: growing the membership, advocating for farmers and rural families, telling the story of North Carolina agriculture, and investing in the future of our state. But the convention is also the culmination of the year’s policy development process — a process that, for more than 80 years, has exemplified the true grassroots spirit of Farm Bureau.

We’ve discussed Policy Review Day in the past, and have talked about how that event kicks off the policy development process.

During the fall, those policy resolutions go back to all 100 counties and are reviewed, debated, and in some cases modified. This involves countless hours of input from thousands of farmers across the state. All of those county recommendations came together earlier this week and were reviewed again by a 100-person committee comprised of farmers.

At Annual Convention, those resolutions will again be discussed by a voting delegate body of more than 600 farmer members. The process is thorough, comprehensive, and is a wonderful example of how North Carolina Farm Bureau has remained true to its grassroots foundations.

As always, we look forward to next week’s Annual Convention, and we are proud of what it means for this organization and North Carolina agriculture.

READ: Eighty Years of Service for North Carolina Farm Bureau

Wednesday, November 22, 2017 Average Thanksgiving Dinner Cost Decreases

From American Farm Bureau Newsroom

The American Farm Bureau Federation’s Thanksgiving Dinner Price Survey shows diners will enjoy a slightly more affordable Thanksgiving dinner this year. Micheal Clements has more.

Clements: The 32nd annual informal Thanksgiving Dinner Price Survey shows consumers continue to enjoy an affordable food supply as this year’s Thanksgiving dinner is the most affordable in five years. The average cost for 10 for a classic Thanksgiving Dinner decreased less than two percent, remaining under $5 per-person, according to AFBF market intelligence director John Newton.

Newton: The price of Thanksgiving Dinner is $49.12, that’s down 75 cents, or one and a half percent from last year and shows that the Thanksgiving dinner is down for the second consecutive year in a row and remains below five dollars per-person.

Clements: The decline was driven by lower retail turkey prices, along with lower prices for milk and rolls. The average cost of turkey this year is $22.38 for the whole bird.

Newton: Wholesale turkey prices are at their lowest level since 2013, and given that the turkey represents nearly 50 percent of the basket’s total, it’s the biggest factor driving the price decline. Turkey prices came this year in at $1.40 per-pound, that’s down two cents from what we saw last year.

Clements: Meanwhile, the supply of pumpkins for processing for pumpkin pie has rebounded from a couple of years ago.

Newton: The supply of pumpkins this year should be more than adequate. We’ve had favorable growing conditions for two consecutive years in a row in Illinois, where the majority of pumpkins are produced.

Clements: Full survey results are available at www.fb.org. Micheal Clements, Washington.

2016 Thanksgiving Dinner Price Survey: Thanksgiving Dinner Ticks Down to Less Than $5 Per Person