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, November 15, 2017 Announcing the North Carolina Farm Bureau Rural Entrepreneur of the Year Finalists

Agriculture is the foundation of North Carolina’s rural economies, and plays a key role in strengthening and supporting our state’s rural communities. But another vital component of rural economic development is rural entrepreneurship – the innovators and creators who build upon the entrepreneurial spirit of agriculture by adding value, developing solutions, and investing in the communities they love.

North Carolina’s growing population is a fertile market for farm direct agricultural consumption. Farmers engaging in on-farm entrepreneurship benefit the state and their neighbors through stewardship of natural resources, creating local economic value, fostering a sense of community and preserving North Carolina’s cultural heritage. Among the types of businesses North Carolina’s rural and farm community develop are experiential businesses such as agritourism, product-based businesses such as farm made foods, value-added products, and crafts and service businesses targeted to the public or other farmers.

North Carolina Farm Bureau is proud to recognize our state’s agriculture and food innovation. This year, for the first time, North Carolina Farm Bureau members will select the North Carolina Farm Bureau Rural Entrepreneur of the Year. From a strong field of 44 applicants, three finalists have been selected based on their impact in rural North Carolina, their impact to the agricultural community, and for the innovation and creativity of their business ideas. The finalists will attend NCFB’s Annual Convention and pitch their businesses to NCFB volunteer leaders, who will vote to decide this year’s winner. The three finalists are:

Devine Farms is an important member of the Catawba County agriculture community. When judges reviewed their application they were impressed with how the Devines have worked with their community to partner with local schools, businesses and non-profits. Judges were particularly impressed with Devine Farms’ purpose to educate individuals about “agriculture, history and how food is produced.” The judges noted, “Their focus on agritourism is a model for other farms attempting to do similar projects.”

 

Fonta Flora Brewery is a fixture in the revival of downtown Morganton. The judges reviewing their application were impressed with their positive impact on jobs in the community. They were also impressed with their dedication to sourcing local ingredients from local farms. Judges also noted that the purchase of a local farm will enable the brewery to produce some of their own ingredients and will further increase the economic impact of the brewery through additional jobs.

 

Four Prongs Tea and Herb located in Watauga County is a value added medicinal herb business. Ginseng is a heritage herb product from Western North Carolina. While the market for ginseng roots is well established, the tops have been considered a waste product—no one uses them, that is until now by Four Prongs Tea and Herb. Judges reviewing their application were impressed by the knowledge base of company founders and the potential to add sales of tea made from ginseng leaves to an already established market for ginseng roots. Judges noted that “Their idea capitalizes on a sustainable niche.”

 

North Carolina Farm Bureau is proud of all this year’s applicants and we wish the best of luck to Devine Farms, Fonta Flora Brewery, and Four Prongs Tea and Herb as they compete for this year’s award. We’re excited to see what you’ll think of next!

Wednesday, September 27, 2017 Farmers Are Multi-Skilled For a Single Purpose

The following article was written by Jessica Walker Boehm and appears in the Fall 2017 issue of North Carolina Field and Family.

Ask a farmer what he or she does on a daily basis, and you’re bound to get a wide variety of answers – there’s planting crops, evaluating soil, predicting weather patterns, caring for livestock, repairing and maintaining equipment, keeping detailed financial records, and much more.

As a result, it’s easy to conclude that farmers routinely multitask their abilities and develop new skills to get the daily job done efficiently and safely. Often, they switch from one role to the next without skipping a beat, constantly working to master new methods and skills that might better serve their farms and livestock.

multi-skilled farmers

“Before I worked in agriculture, I thought you just put a seed in the ground and watched it grow, then had something to harvest at the end of the season,” says Russell Hedrick, a first-generation farmer who owns JRH Grain Farms in Hickory. “I had no idea about the technology you can employ to ensure you grow a better crop, and I didn’t realize how much I would learn once I was immersed in this occupation.”

MORE THAN A FARMER

Just of few of the skills farmers master to accomplish their jobs:

  • accountant
  • advocate
  • conservationist
  • educator
  • entrepreneur
  • feed consultant
  • marketer
  • mechanic
  • meteorologist
  • public speaker
  • researcher
  • soil scientist
  • technology expert
  • veterinarian
  • welder

Established in 2012, JRH Grain Farms is a 1,000-acre, no-till operation that includes corn, soybeans, wheat, barley, oats and triticale (a hybrid of wheat and rye), as well as pasture-raised beef cattle, Katahdin sheep and Berkshire pigs.

JRH Grain Farms also has a seed- cleaning facility that serves various local farms, and Hedrick says his farm is the only one in the state that produces bourbon. Additionally, Hedrick makes legal moonshine and stone-ground grits and cornmeal.

His operation has evolved over the years as he has continued to learn about soil science and technology. For example, he now uses sensors buried 48 inches in the ground to monitor soil moisture and temperature, as well as rooting depth and electrical conductivity, helping him to conserve water.

Hedrick has also worked with scientists and researchers across the U.S. to reduce his farm’s soil fertility needs by approximately 70 percent, which further contributes to his conservation efforts and results in significant cost savings. In addition, he has created a cover crop by blending five different plants that helps limit soil erosion, suppress winter weeds, scavenge excess nutrients from the preceding crop and improve the soil’s biological health.

multi-skilled farmers

Russell Hedrick of JRH Grain Farms

He sharpens his educator skills regularly, sharing his knowledge with other farmers who might also bene t from it. Hedrick hosts a Field Day each year that features guest speakers like Ray Archuleta, a famed North Carolina conservation agronomist, where farmers have the opportunity to learn how they can enhance their operations and improve their soil without damaging the environment.

In addition, Hedrick is a businessman, marketing his products directly to consumers using social media channels like Facebook and Twitter, and he promotes agriculture by working with organizations like Catawba County Farm Bureau’s Young Farmers and Ranchers team and the North Carolina Farm Bureau.

“I try to advocate for agriculture any way I can,” Hedrick says. “Here in Catawba County, we have Farm to Fork Week every June, and the last two years my farm has hosted a daylong event. Members of the community have come out and looked at our equipment and our operation, and this year we hosted kids of all ages.”

Wednesday, September 13, 2017 The Importance of Infrastructure

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

Initiatives for rural transportation, energy and broadband internet will benefit the state economy

North Carolina’s rural transportation, energy and broadband internet infrastructures are as important to economic development as seed, sun and water are to crops. Economic development is vital for the future of our farmers, rural communities and the population of the entire state.

There is no single “cure-all” for the ailing economies of many rural counties, but these areas have the potential to contribute an additional 38,000 jobs and $10.3 billion to the state’s annual income over a decade, according to a 2014 study commissioned by the NC General Assembly.

Because of this potential, the North Carolina Food Manufacturing Task Force was established April 9, 2015. The Task Force seeks to boost the rural economy with a world-class food processing industry.

The quality of roads and bridges tops the list of infrastructure needs that have a direct impact on the economic viability and quality of life in our rural communities. TRIP, a national transportation research group, recently reported, “North Carolina’s rural roads have high rates of fatalities, bridges show deficiencies; the state’s rural transportation system is in need of modernization to better support economic growth and connectivity.”

The Federal Communications Commission’s 2016 Broadband Progress Report stated that 10 percent of all Americans lack access to high-speed broadband service, while 39 percent of rural Americans lack access. By contrast, only 4 percent of urban Americans lack access.

Affordable electricity and access to natural gas are also crucial for economic development. The Atlantic Coast Pipeline will provide natural gas to the rural utilities that need it to serve their communities, and is estimated to lower energy costs for consumers and businesses while contributing an estimated $28 million in annual property taxes to local governments.

Agriculture is a crucial component of future economic development in rural North Carolina through the creation of value-added processing jobs and economically symbiotic small business.

Diverse agriculture, combined with an improved infrastructure, can result in the state emerging as a global food leader. State and federal funding, along with private investment, is required to make infrastructure investments that ensure our rural communities have roads that are well-maintained, energy that is affordable and broadband internet that is accessible.

Wednesday, August 9, 2017 Leader Chosen, Plant Sciences Initiative Poised to Problem-Solve

Written by published on NC State’s CALS News.

The North Carolina Plant Sciences Initiative isn’t all roots and stems.

It’s genetics. It’s robotics. It’s big data.

And with this week’s announcement of a newly hired launch director, it’s about to get rolling — in a big way.

We can make a mark on agriculture for generations to come.

 

Entomologist, agricultural biotechnology business professional and commodity leader Stephen Briggs is now signed on to make this one-of-a-kind plant sciences research enterprise, housed in the College of Agriculture and Life Sciences at NC State University, a reality.

“I believe in our stakeholders’ vision that this can be the Silicon Valley of agriculture for the world,” Briggs said. “We can make a mark on agriculture for generations to come.”

Briggs steps in at a critical time for the interdisciplinary, multi-partner initiative. In less than three years, the NC PSI has transitioned from a “big idea” to a highly anticipated center for plant sciences innovation. With the broad support of North Carolina’s agricultural community, the initiative will break ground on its state-of-the-art facility in 2019, with doors opening in fall 2021.

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, June 21, 2017 The Importance of Agriculture

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

New task force promotes agriculture and rural prosperity

At North Carolina Farm Bureau, we advocate for farmers in the halls of Congress and the offices of the N.C. General Assembly, but we’re nonpartisan. Our focus is with our family farmers and their rural neighbors. They established this organization, and it belongs to them.

On April 25, President Donald J. Trump did something good for farmers and agriculture. He issued an executive order entitled “Promoting Agriculture and Rural Prosperity in America.” Much of it reads like a battle plan farmers might use if storming their enemies’ furrows.

Wednesday, June 14, 2017 You Decide: Can Urban and Rural Areas Get Along?

Written by Dr. Mike Walden and originally published at NCSU CALS News.

My wife and I have one foot in rural regions and the other in big cities. We were both born and raised in small towns – I in an unincorporated town (meaning it wasn’t big enough to qualify as an official municipality) in Ohio and she in a recognized town (but still tiny) in upstate New York. I have a vague memory of my mother pulling me in a little wagon to the country store for groceries. On the way home, the groceries were in the wagon and I would walk!

But we’ve spent almost the last forty years of our lives living in Raleigh since I joined the faculty at N.C. State in 1978. Although it may not have been when we moved here, Raleigh today is certainly a big city. Indeed, it is recognized as one of the most dynamic big cities in the country.

My wife and I love both cities and the country. That’s one reason North Carolina is so great – it has both busy urban areas as well as tranquil rural regions.

But often the urban and rural areas don’t seem to get along. For example, in the 2016 presidential election, urban areas tended to vote for Secretary Clinton while rural regions favored President Trump. We saw the same urban/rural split in the North Carolina gubernatorial and General Assembly elections.

The urban-rural divide in North Carolina also extends to public policy. Here are two examples. Local public schools are partially supported by local property tax revenues. Since property values per resident are often higher in urban counties than in rural counties, there’s been a long-running debate whether this wealth disparity gives urban counties an unfair advantage in funding public schools.

The second example is sales taxes. Part of the sales tax revenues collected by the state are returned to the counties, but there’s an issue over how to do this. Should the distribution to counties be based on where the sales occurred or where the buyers live? North Carolina has a formula using both factors, but there’s frequently a debate about the relative importance of each in the formula. Indeed, legislation was introduced this year in the General Assembly to change the formula.

Has the urban-rural feud gotten worse? Some say three powerful forces – globalization, the elevation of education’s importance and population trends – have moved urban and rural areas farther apart in recent decades.