Weekly AgNews – October 3, 2017

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Senate Budget Requires No Cuts from Farm Bill

Congress has yet to establish its FY 2018 Congressional Budget. The Senate Budget Committee took a step forward last week as it released its version of the FY 2018 Congressional Budget. The budget plan sets the stage for tax reform. The Senate version would allow an additional $1.5 trillion to be added to the deficit over 10 years for tax reform purposes. The plan also does not require any cuts to mandatory spending programs except for $1 billion from the Energy and Natural Resources Committee which would come from opening up oil drilling in the Arctic National Wildlife Refuge. This means the next farm bill would not have to cut spending for deficit purposes if the Senate version prevails. The Senate Budget Committee is expected to vote on its plan this week.

The House Budget plan for FY 2018, which will likely be voted on this week in the House, in contrast does not allow additional deficit spending for tax reform purposes and calls for over $200 billion in cuts to mandatory spending including $10 billion from the Supplemental Nutrition Assistance Program. House Agriculture Committee Chairman Conaway would be expected to make those cuts separately from the next farm bill. The two versions will have to be reconciled before Congress passes a final Congressional budget.

Republicans Released Tax Reform Framework

Republican leaders released their initial framework for tax reform plan, called the “Unified Tax Reform Framework.” A key part of the tax reform framework for businesses is the expansion of immediate expensing of any equipment. Under the plan, the corporate tax rate would be lowered to 20 percent, while small and family owned businesses that operate as sole proprietorships, partnerships and S corporations would have their tax rates capped at 25%. The estate tax would be eliminated while other details are still forthcoming about writing off interest expenses, stepped up basis, cash accounting, and Section 1031 like-kind exchanges on real estate.

Read the Framework

Appraisal Subcommittee Issues AMC Revised Policy Statements for Comment

The Appraisal Subcommittee (ASC) published in the Federal Register proposed revised policy statements on September 20. The proposed Policy Statements provide guidance to ensure State appraiser certifying and licensing agencies comply with Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended. The proposed Policy Statements, if adopted by the ASC, would supersede the current ASC Policy Statements.

The ASC is proposing a new Policy Statements 8 through 12 for AMCs. Statement 8 reflects the statutory provision that States are not required to establish an AMC Program, but clarifies for those States that establish AMC programs they are subject to ASC oversight and guidelines. Policy Statement 9 establishes requirements for States with an AMC Program to maintain the AMC Registry in the same way they maintain the Appraiser Registry. Statement 10 sets requirements for States’ AMC enforcement programs and Statement 11 clarifies the implementation period. Statement 12 sets interim sanctions that may be imposed on State programs when those programs fail to be effective.

Comments are due by November 20, 2017.

Read the Full Policy Statement

Senate Ag to Vote on Nominees, Hold Addition Nomination Hearings

The Senate Agriculture Committee plans to hold confirmation votes for Steve Censky, Deputy Secretary, and Ted McKinney, Undersecretary for Trade and Foreign Agricultural Affairs, today. Both are expected to be approved and moved to the full Senate for a confirmation vote. Additionally, the Senate Agriculture Committee has scheduled nomination hearings on Thursday for Gregory Ibach nominated for Undersecretary for Marketing and Regulatory programs and William Northey, of Iowa, to be Undersecretary for Agricultural Production and Conservation. Northey would oversee the Risk Management Agency in addition to the Farm Service Agency and the Natural Resource Conservation Service.

RMA Releases Market Penetration Analysis

The Risk Management Agency released a Market Penetration and Market Potential analysis document in September. In 2015, the most recent year analyzed, the crop insurance program insured 89% of eligible acres for principal crops (barley, corn, cotton, grain sorghum, peanuts, potatoes, rice, soybeans, tobacco and wheat), 74% of eligible fruits and nuts acres and 34% of eligible vegetable acres. Comparable numbers from 1990 are 38%, 17% and 16% respectively. Interestingly, cotton and rice eligible acres were insured at 100% in 2015 according to the report, while corn was at 89% and soybeans at 90%.

The two areas where significant market potential exists are in hay, insured at only 9% in 2015 and livestock insured at 1%.

Read the Full Report

Ag Trends Reveal More Than Who’s ‘King of the Mountain’

Agriculture’s foam finger is now in the hands of Kern County officials as the San Joaquin Valley’s southernmost region reports a $7.18 billion crop value for 2016 – high enough to beat out Tulare ($6.37 billion) and Fresno counties ($6.18 billion) for the annual bragging rights among local officials.

Kern County Agricultural Commissioner Glenn Fankhauser says this is a first for Kern, which until about 2012 was locked in a perpetual battle for second place with Tulare County as their northern neighbor owned first place among what I’ve affectionately termed “The Big 3.”

Kern’s rise to first place in gross value among the nation’s agricultural counties came as pistachios and almonds became a profitable alternative to row crops and dairies.

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Syngenta Agrees to Settle U.S. Farmer Lawsuits over GMO Corn

Sept 26 (Reuters) – Syngenta AG said on Tuesday it agreed to settle U.S. farmer lawsuits stemming from its decision to commercialize a genetically modified (GMO) strain of corn before China approved importing it, and a person familiar with the matter said the payment would be close to $1.5 billion.

The settlement does not apply to lawsuits filed by U.S. grain handlers Archer Daniels Midland Co and Cargill Inc against the Swiss seed maker, spokespeople for the three companies said.

Cases brought by farmers in Canada are also still pending, Syngenta spokesman Paul Minehart said.

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Livestock Forage Program Could Do More for Producers, Ranchers Say

PETTIBONE — Most of North Dakota, South Dakota and Montana have experienced drought conditions this year. Livestock producers, in particular, have been the focus of relief efforts in the region. But a North Dakota couple worries one program is not delivering as advertised.

The Livestock Forage Program, administered by the U.S. Department of Agriculture’s Farm Service Agency, pays out to livestock producers who operate in counties that have been in extreme or exceptional drought at any time as determined by the U.S. Drought Monitor, or that have been in severe drought for at least eight weeks.

Robin and Shelly Ziesch believed the program paid $30 per head per month and were disappointed to learn producers get 60 percent of that amount, minus an additional “sequestration fee.” That meant their total payment came in at a little more than half of what they were expecting.

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Farmers Watching Trump Tax Reform Plan

Today, President Trump will visit Indiana to promote his new tax reform plan. The President will make his remarks at the Farm Bureau Building at the Indiana State Fairgrounds, an appropriate venue since tax reform is of vital concern to the farm community. “Agriculture operates in a world of uncertainty. From unpredictable commodity and product markets to fluctuating input prices, from uncertain weather to insect or disease outbreaks, running a farm or ranch business is challenging under the best of circumstances. Farmers and ranchers need a tax code that recognizes their unique financial challenges,” according to the American Farm Bureau Federation.

Farm Bureau supports replacing the current federal income tax with a fair and equitable tax system that encourages success, savings, investment, and entrepreneurship. They believe that the new code should be simple, transparent, revenue-neutral, and fair to farmers and ranchers. They advocate for a tax code that recognizes their unique financial challenges. Farm Bureau members share the need for tax reform on cash accounting, immediate expensing, business interest expense deduction, and estate and capital gains taxes.

The President’s plan has had input from the agriculture sector. Indiana farmer Kip Tom has been working with the Trump administration on the details of the plan. While many of the details of the reform plan are not known at this time, doing away with the estate tax is one aspect that the farm community would strongly support. Tom and his family have said, under current estate taxes, they may have to sell off assets in order to continue the business into the next generation. Preservation of cash accounting is another key element that farmers want to see in any reform plan.

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An Example of Combining Margin Protection and Revenue Protection

The new Margin Protection crop insurance policy can be purchased along with any COMBO product. Doing so will allow farmers to have “county” margin protection up to a 95% coverage level combined with farm-level coverage for revenues at lower coverage levels (see farmdoc dailySeptember 12, 2017). A specific illustration of combining Margin Protection with Revenue Protection for the years from 2000 to 2016 is provided in this article.

The Sangamon County Example

The specific example is for corn in Sangamon County, Illinois. Estimated Margin Protection payments were simulated in a farmdoc daily article released on September 19, 2017.

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USDA Fails to Monitor Foreign Owners of Farmland

A law requiring foreign investors to report transactions of farmland to the U.S. Department of Agriculture has been on the books for almost 40 years.

But as the amount of foreign-controlled farmland doubled in millions of acres between 2004 and 2014, the USDA has lapsed in enforcing the law, a review of USDA documents has found.

The Agriculture Foreign Investment Disclosure Act was passed in 1978 to combat fears about increasing foreign investment in farmland.

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Mississippi State University Further Cements Leadership Role in UAS Research

With the recent opening of the Department of Homeland Security’s Common Unmanned Aircraft System Site at the Camp Shelby, Miss., military base, Mississippi State University is further poised to continue its major research and development programs for small unmanned aircraft systems, says MSU President Mark Keenum.

In a letter to university staff, alumni, and friends, Keenum says the opening of the facility at Camp Shelby, near Hattiesburg, in partnership with Homeland Security, represents “an important initiative” that will result in “major contributions to national security and drone technology.”

Partners include the Mississippi National Guard’s Camp Shelby Joint Forces Training Center, the Mississippi Air National Guard’s Gulfport Combat Readiness Training Center, NASA’s Stennis Space Center, the Jackson County Port Authority, and the Hancock County Port and Harbor Commission.

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The Education Foundation Needs You! 

Time is getting short and the 2017 ASFMRA Education Foundation Auction at the Annual Conference is rapidly approaching. The Foundation Legacy Funding Committee has been busy planning another great and fun auction event for you. We are very grateful for the support of the raffles at SEW and look forward to similar support from the membership in Savannah. So, you may be asking yourself, what can “I” do to help? Well, we already have several great donations for the auction, including hunting/fishing trips, a Charlie Daniels autographed fiddle, race trip, Stetson hat, and others. BUT, there is still ample opportunity to send your donation; something unique, something that highlights your region of the country, whatever you think you would like to share with the membership. Be it large or small, we are grateful for all donations as these will go to either the Live or Silent auction and will help to raise funds for the Education Foundation. These, in turn, help to pay for development and promotion of our outstanding education curriculum and enable the Society to continue those programs without a dues increase to cover the costs. SO…… decide what you can donate and please let Hope Evans know as quickly as possible so that it can be cataloged and the staff will not be scrambling at the last minute to get everything lined up for the auction. So, please do what you can, either by donation or by purchasing something at the auction. Contact Hope Evans if you have any questions, or for shipping instructions. On behalf of the Legacy Funding Committee, we look forward to seeing you in Savannah for another great Conference and Auction event.

Appraiser Qualifications Board Public Meeting Summary

On September 8, 2017, the Appraiser Qualifications Board (AQB) held a public meeting in Minneapolis, MN. The meeting provided the AQB with an opportunity to hear public comment on potential changes to the 2015 Real Property Appraiser Qualification Criteria (Criteria) the Board may consider exposing. In addition, the Board provided an update on the following AQB programs:

• National Uniform Licensing and Certification Examinations
• Course Approval Program
• Graduate/Undergraduate Real Estate Degree Review Program

Proposed Changes to the Real Property Appraiser Qualification Criteria

Over the past two years, the AQB issued a concept paper, discussion draft, and three exposure drafts of proposed changes to the Criteria. Despite the unprecedented amount of public comment, the end result was a lack of consensus on the proposals.

On Wednesday, September 6, the AQB continued its outreach efforts by meeting with individuals representing state regulators, educators, the banking industry, appraisal management companies, the REALTORS®, and the technology sector. The AQB posed specific questions to this group regarding the qualifications for real property appraisers and received constructive feedback.

Additionally, the AQB held a public meeting on Friday, September 8, and received additional feedback from the public on changes to the real property appraiser qualifications it may consider proposing. The AQB intends to seek feedback on these possible changes from the Association of Appraiser Regulatory Officials at its meeting this October in Washington, DC. Shortly thereafter, the AQB intends to issue its Fourth Exposure Draft, seeking public comment on specific proposed changes to the qualifications.

National Uniform Licensing and Certification Examinations

The AQB continues to monitor and update the National Uniform Licensing and Certification Examinations. To review exam statistics from 2008-2016, please click here.

Course Approval Program

The AQB’s Course Approval Program currently has 288 courses approved. To review the objectives of this program as well as the approved course list, please click here.

Graduate/Undergraduate Real Estate Degree Review Program

The Graduate/Undergraduate Real Estate Degree Review Program was established by the Board to facilitate the approval of college-level education for individuals who would like to become an appraiser. The review is free of charge to interested colleges/universities. For further details and to review a current list of approved programs, please click here