18 January 2015 - Help for Beginning Farmers

There is a growing concern at USDA in Washington, D.C as well as rural America over the advancing average age of farmers and ranchers in this country. It was a subject for discussion at the American Farm Bureau Convention in San Diego earlier this month by Farm Bureau members and Secretary of Agriculture Tom Vilsack.

Comparing Ag Census numbers from the 2012 and 2007 Census surveys, we should be concerned. In that five year period, the average age of agricultural producers went up 1.2 years to 58.3 years, continuing a 30-year trend of increasing age. And the number of beginning farmers (on their farm 10 years or less) went down 20% in that five-year period.

Several surveys of young “wannabe” farmers list two major obstacles...getting financing to cover the high cost of equipment and land, and the availability of farm land. Very often, young farmers are outbid by well-established older farmers who want to add to their land holdings. So, the easiest way to get into farming for young men and women is and always has been to inherit the land from their parents.

But at the Farm Bureau Convention, Secretary Vilsack said there are some new programs to help beginning farmers in the new farm bill, and then presented what I considered to be an interesting idea. The Secretary said Congress should start work on a tax reform package that would include tax reforms for ag producers and offered this proposal.

He talked about his situation; he and his wife have owned a farm for many years, neither of their two sons have any interest in farming, and under the present tax laws, the farm will more than likely stay in their ownership until they pass and then will be sold by their heirs to the highest bidders. The reason they won’t sell is because of the capital gains tax. He said with the value of farm land increasing as much as ten times in their years of ownership, the tax bill would be enormous.

He then said Congress, in writing a tax reform bill, should provide a special incentive for land owners like them, who might consider selling their land to a beginning farmer, perhaps at a lower price if the capital gains tax bill were to be treated differently in this situation. Tax reform is extremely difficult to move through Congress, but I certainly feel this is an idea worth pushing to help young people realize their dream to become a farmer or rancher.

My thoughts oin Samuelson Sez.