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?
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, November 1, 2017 2017 Legislative Long Session Recap

The NC General Assembly adjourned (again) a couple weeks ago, and with November officially upon us it’s probably as good a time as any to put a bow on this year’s legislative session. Overall, it was a good session for North Carolina agriculture, with the General Assembly enacting several important measures to help farmers. Today, we want to give you a quick overview of a few key legislative actions.

Wednesday, October 25, 2017 5 Questions with Senator Brent Jackson

Brent Jackson was elected to the North Carolina Senate in 2010 and is currently serving his fourth term representing Duplin, Johnston, and Sampson counties. He is the co-chairman of the Senate Appropriations/Base Budget Committee and serves on numerous other committees as well.

Jackson and his wife Debbie are first generation farmers, starting Jackson Farming Company in Sampson County in 1981. They currently grow watermelons, cantaloupes, honeydews, strawberries, pumpkins, corn, wheat, soybeans, peanuts, flue-cured tobacco, occasionally cotton, and various other crops.

Question #1: There are only five North Carolina legislators (about 2% of the General Assembly) who list farming as their occupation. As a farmer, what perspective do you bring to the General Assembly? Conversely, is there anything you’ve learned as a legislator that has given you new perspective on the farm?

There are a wide variety of backgrounds amongst my fellow legislators, and I believe that everyone’s individual and unique experiences are a source of value. As a farmer, I have tried to ensure that my colleagues know where their food comes from and the work that goes into putting food on the shelves. I have also made it a point to stress the goodness of American agriculture and the wonderful and exciting career opportunities that exist, especially for young people.

Question #2: In your opinion, what is the most significant state-level issue facing farmers in North Carolina? And what is one issue that may not be on the front-burner for farmers that you think they need to pay more attention to? Why?

I think there are several main issues that we will have to continue to work on at the state level. The first is labor, although mainly a federal issue and President Trump and Congress are working on a solution. However, it is important that from a state level, we are careful not to pass laws making it more difficult for farmers to use a legal workforce. Without a reliable and legal workforce, crops cannot be harvested.

We must also make sure that our regulatory framework is set up to foster growth in the industry and recognize that one-size-fits-all regulations rarely work in farming. Water rights will continue to be an issue that we must remain vigilant on. It will be important for farmers to make their voices heard as the EPA goes about reviewing and rewriting the Waters of the US (WOTUS) rule.

Farming is a way of life in rural North Carolina, and we must do a good job working with our urban citizens to ensure that rural and urban North Carolina works in harmony.

Another issue that we must tackle to ensure the future of farming is the average of the farmer, which in North Carolina is in the mid-50s. Too many of our children in rural communities are moving off the farm and to the cities. It is crucial that we make sure we inspire the next generation of farmers and expose our children to the career options that the ag industry offers. We must also make sure that we help first-generation farmers overcome the barriers to entry, especially given the price of equipment and land.

Question #3: Obviously, you’re very involved in agriculture policy at the legislature. What is another policy area you spend a lot of time working on?
Wednesday, October 4, 2017 5 Questions with Representative Jimmy Dixon

Jimmy Dixon was elected to the North Carolina House of Representatives in 2010 and is currently serving his fourth term representing Duplin and Wayne counties. He chairs the House Agriculture Committee, is Vice-Chairman of Appropriations, and serves on numerous other committees as well. A few years after graduating from Wake Forest University in 1969, working for Procter & Gamble and teaching school, Rep. Dixon returned to his roots in 1973 and started a farming career raising poultry and vegetables for forty one years until his ‘semi-retirement’ in 2014.

His poultry operation grew over the years to raising about 700,000 heavy tom turkeys each year. His main crop production was string beans, cucumbers, and peppers.

He and his wife, Bobby Jean, have five children and six grandchildren.

Question #1: There are only five North Carolina legislators (about 2% of the General Assembly) who list farming as their occupation. As a farmer, what perspective do you bring to the General Assembly? Conversely, is there anything you’ve learned as a legislator that has given you new perspective on the farm?

As a farmer in the General Assembly, I understand that there are many good reasons that we have remained a free nation for these many decades. However, all those reasons combined may not equal the fact that we have been able to feed ourselves and produce an extra amount of safe economical food and fiber to help feed a hungry world.We must never lose the ability to feed ourselves!I have learned as a legislator that the great challenges facing farmers are, in part, twofold. First, government can change the rules in the middle of the game and increase regulations that strangle efforts to be productive. Secondly, special interest groups have leveraged influence within Corporate Board Rooms across the nation that facilitate retail boycott to promote undue regulations and change practices harmful to many safe and well established farming production methods.

Question #2: Has there been one agriculture-related policy provision that you have felt most passionate about, or that you feel would have the most positive impact on farmers?

I think two of the most important legislative actions taken since I have been in the General Assembly are the passage of H405 Property Protection Act passed in 2015 and H467 Agriculture and Forestry Nuisance Remedies passed in 2017.I have probably been more passionate about these two bills than any other bills we have passed because of their far reaching positive effect on our ability to unshackle farmers from misguided special interest groups who rely on the sensational and abnormal portrayal of some of our farming practices.

Question #3: What agriculture-related issues are you working on in preparation for the 2018 short session?
Thursday, July 6, 2017 Farmers Support the 2017 Farm Act

Last week, the North Carolina General Assembly passed the 2017 Farm Act, a bill that we’ve written about before and that NC Farm Bureau strongly supports.

Wednesday, April 12, 2017 No Rocket Scientists Needed

The following commentary is by North Carolina Farm Bureau President Larry Wooten.

Immigration reform has been discussed, debated and argued for years, but eventually concludes with the same tired result – “next year is the year!”  To be blunt, fixing our worn-out immigration system does not require a rocket scientist. And this year needs to be the year.

What’s Going on with the Ag Workforce?

The short answer is, it’s changing. When I was still actively farming during the 1970s, 80s, and 90s, most of our farm workers were American citizens. But during the 90s that began to change, and farmers had to react to the change in their labor pool. What was happening over this time is American workers were taking other types of jobs for a number of reasons, but partly because people were becoming more educated and partly because of urbanization. Still needing workers, farmers began hiring more foreign-born workers because they were willing to do the job, and do it well.

Figure 1: In the 1970s, only 2.7 percent of male farmers and farm laborers and 3.8 percent of female farmers and farm laborers were born abroad. Those numbers began to grow considerably during the 1990s, and by 2012 the percentages had ballooned to 26.9 percent.

Another trend farmers have been riding is mechanization. As farm workers have become more difficult to find, many farmers have looked to technology to help them get the job done. And for many farmers, technological advances have been a huge help in addressing workforce shortages.

The problem is that farmers aren’t magicians – eventually they reach a breaking point. And if we aren’t there yet, we’re getting close.

Wednesday, March 15, 2017 Farmers Flock to Jones Street for 2017 Agriculture Awareness Day

Ask most farmers and they’ll probably tell you they don’t like taking days off the farm. The job demands a lot of time and attention, and it’s critical that farmers stay on top of the day-in day-out tasks (like covering strawberries before a freeze) that lead to a successful year. But today, hundreds of dedicated farmers and friends of agriculture from communities all across the state have left their farms to do another kind of work—meeting with their legislators. That’s because today is NC Agriculture Awareness Day, a day for farmers and ag leaders to bring awareness to the legislature about the importance of agriculture in North Carolina. And it’s an essential task too; with so few legislators involved in agriculture, today’s rally is a valuable opportunity to help legislators understand the challenges that farmers face.

So what are some of those challenges farmers will be discussing with their legislators? Ask ten farmers and you might get ten different answers, but there are a few themes that rise to the top. This year, the key messages that Farm Bureau members will be delivering are:

Hurricane/Wildfire Recovery

  • Last year, the legislature appropriated $200 million in hurricane/wildfire relief.
  • But even though we’re many months removed from those disasters, many NC farmers are still recovering.
  • We support additional disaster relief funding during appropriations process.

Preserve Present Use Value Program

  • The Present Use Value Program provides qualifying farms with property tax relief by taxing the land based on its present use (farming or forestry) and deferring market value taxes.
  • This helps farms continue production and preserves farmland.
  • We support the preservation of this vital tax program.

Preserve Ag Sales Tax Exemptions

  • Eligible farmers are exempt from sales tax on farm equipment, inputs, and services.
  • This helps prevent double taxation on farm products and products derived from agriculture.
  • The legislature should maintain these exemptions if tax reform legislation is considered.

Healthcare Costs

  • Most farmers purchase health care in the individual market because they are often small businesses or sole proprietorships that don’t have access to group coverage.
  • Farmers are bearing the brunt of significant health insurance increases and struggle with inconsistencies in premium subsidies.
  • Farmers are also dealing with a sluggish ag economy and disaster recovery, further cutting into their bottom line.
  • Legislators should work to keep health care costs down.

North Carolina Agriculture is not only our state’s largest economic driver but it also supports more than 600,000 jobs—about one out of every six in the state. That’s why it’s important that legislators are kept up to date on ag issues; because if ag is hurting, then so is our economy.

NC Farm Bureau would like to thank all of the legislators who take time to meet with our farmers and hear their concerns.