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ASFMRA Ag News - March 14, 2023

By ASFMRA Press posted 03-13-2023 11:30 PM

  

Maryland Farmers Seek Protection From Surprise Tax Bills


Howie Feaga got an eye-popping tax update last year for his farm in Ellicott City, Maryland. The assessed value of his buildings had leaped from $400,000 to $1.2 million, translating to a huge overnight increase in his property taxes.

“Farm buildings do not increase in value like that,” Feaga, of horse and beef operation Merry Acres Farm, told lawmakers Feb. 21. “Please understand that farmers that farm for a living cannot make a change in their budgets to handle an increase like that.”

Feaga was able to get his assessment reduced on appeal, but his experience typifies what Maryland ag advocates say has become an alarming trend over the past few years — reassessments raising the value of farm buildings by triple-digit percentages.

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Stakeholders Urge IRS to Retain Carveout in Syndicated Conservation Easement Regs


Various tax and land conservancy organizations are imploring the IRS to retain a carveout for donee organizations in forthcoming final regs addressing syndicated conservation easements, arguing that eliminating the carveout would only harm well-to-do taxpayers.

In Notice 2017-10, the IRS took the position that some syndicated conservation easement transactions are “listed” transactions, meaning they are reportable as abusive tax shelter transactions. In such transactions, promoters purport to give investors in a partnership or another pass-through entity the ability to claim a charitable contribution deduction that far-exceeds the invested amounts. The Sixth Circuit Court of Appeals and the U.S. Tax Court in recent litigation held that listed transactions must be identified in regs and not through supplementary guidance such as the notice.

The IRS disagreed but nonetheless begrudgingly obliged, issuing proposed regs December 7 to reflect the notice and grant it the proper authority. According to IR 2022-214, the regs were intended to “eliminate any confusion regarding the need to report these transactions and to ensure that these decisions do not disrupt the IRS’ ongoing efforts to combat abusive tax shelters throughout the nation.”

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Study Analyzes Land Ownership by Location


Experts expect nearly 40% of American agricultural land will transition ownership in the next 15 years. As Kansas farmers retire and land is either sold or inherited by farming or non-farming heirs, the makeup and location of the new owners of that land has been changing over time, reports Kansas State University agricultural economist Robin Reid.

Reid worked with the Kansas Property Valuation Division of the Department of Revenue to analyze agricultural land ownership by location. The researchers used data from 2015, the last most complete year of data available. The results, reported in January, show that 84.5% of acres in the study are owned by individuals or entities residing in Kansas. Of those, 54.6% live in the same county as their parcel.

The remaining 15.5% of acres were owned by individuals or entities residing outside of Kansas; Texas tops the list at just over 1.2 million Kansas agricultural land acres owned by Texans. Colorado, Oklahoma, Nebraska and Missouri — states bordering Kansas — own the next-largest portions of Kansas ag land. California individuals and entities follow, with just under 450,000 acres.

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Robot Measures Leaf Angles, Helping Breed Better Corn Plants


Researchers from North Carolina State University and Iowa State University have demonstrated an automated technology capable of accurately measuring the angle of leaves on corn plants in the field. This technology makes data collection on leaf angles significantly more efficient than conventional techniques, providing plant breeders with useful data more quickly.

“The angle of a plant’s leaves, relative to its stem, is important because the leaf angle affects how efficient the plant is at performing photosynthesis,” says Lirong Xiang, first author of a paper on the work and an assistant professor of biological and agricultural engineering at NC State. “For example, in corn, you want leaves at the top that are relatively vertical, but leaves further down the stalk that are more horizontal. This allows the plant to harvest more sunlight. Researchers who focus on plant breeding monitor this sort of plant architecture, because it informs their work.

“However, conventional methods for measuring leaf angles involve measuring leaves by hand with a protractor – which is both time-consuming and labor-intensive,” Xiang says. “We wanted to find a way to automate this process – and we did.”

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Museum Of Chincoteague Island Calls For Donations To Save Historic Beebe Ranch


Virginia's Chincoteague Island is fortunate to have visitors come from around the world to enjoy the untampered seashore, amazing wildlife, and the quaint historical downtown. Many of those visitors also come because of Misty of Chincoteague, a book published in 1947 by Marguerite Henry that inspired millions.

Misty of Chincoteague tells the against-the-odds story of two siblings Paul and Maureen Beebe. These two children lived on the ranch with their grandparents, Clarence and Ida Beebe (affectionately called Grandma and Grandpa Beebe in the story). The charming story centers on the children's desire to buy the wild pony of their dreams and the challenges they faced to make that dream a reality. It is a heartwarming tale that made the Beebe family, Misty, and the Beebe Ranch a beloved part of the literary world.

Now, after 100 years, the Beebe family need to sell the ranch. The demands of maintaining the ranch plus the desire to use the funds to help their aging family is certainly a good enough reason to sell. The Museum of Chincoteague Island appreciates all they have done to preserve the remaining 10.3 acres of the ranch. This property is where Misty spent most of her life, and the original home still stands. The Beebe family has reached out to the Museum in the hopes that the museum could acquire the property and maintain it as the ranch. Allowing it to be incorporated into the museum would help protect it for many years to come. Because of the circumstances, the museum has been given one month to see if they can generate the funds to purchase the property.

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ASFMRA Government Relations Update


FY 2024 Biden Administration Budget Released

President Biden released his Administration’s FY 2024 Budget proposal last week. In terms of the Department of Agriculture, the 2024 request for USDA funding subject to appropriations is $32.6 billion, slightly more than 14.4 percent increase above the 2023 enacted level. Of that amount, $455 million is requested to fund a 5.2% pay cost increase for USDA employees. House Republicans are proposing to roll back spending levels to FY 2022 levels or roughly $29 billion for USDA appropriated accounts.

The budget request includes no proposals to cut crop insurance, commodity, or conservation programs. It does include a request to make permanent the $5 per acre premium discount for cover crops. The budget estimates a cost of roughly $100 million per year or $1 billion over 10 years for the additional premium discount. It does not offer a way to pay for it.

The budget request for FSA S&E is $1.584 billion compared to $1.521 billion enacted in FY 2023. RMA S&E is requested at $78 million compared to $67 million enacted in FY 2023. Part of the RMA S&E increase includes $5.2 million for additional staff to conduct reviews and investigations to ensure adequate oversight of the Federal Crop Insurance Program and continue program expansion to meet producer needs for an effective safety net. The Natural Resource Conservation Service S&E is requested at $1.246 billion compared to $1.034 billion enacted in FY 2023.

House Agriculture Committee’s Views and Estimates Letter to Budget Committee

Every year the House Agriculture Committee sends a letter to the House Budget Committee outlining the Agriculture Committee’s needs as the Budget Committee puts together the House budget proposal. This year with the farm bill looming is particularly important from a budget perspective. The Agriculture Committee approved its letter last week. While not directly calling for additional funding for commodity programs, the letter makes the strong case that additional funds are needed. In his press statement after the letter was approved, Chairman G.T. Thompson (R-PA) says, in part, … “(w)hile additional funds are necessary, there is no piece of legislation that provides a better return on investment than the Farm Bill.”

House Votes to Block WOTUS Rule, President Threatens Veto

In a bipartisan vote (227 -198) last week, the House approved a Congressional Review Act (CRA) measure that would block the Biden Administration’s Waters of the U.S. (WOTUS) rule.  The Senate could take up the measure as well. President Biden has indicated that he would veto the bill and neither the House nor the Senate have the votes to override a veto.   The Supreme Court is expected to announce its ruling in Sackett v. EPA by June of this year, while the Biden Administration’s WOTUS rule goes into effect on March 20, 2023.

House Agriculture Hearing Reviews Challenges for American Agriculture  

House Agriculture Committee Chairman G.T. Thompson (R-PA) chaired his first full committee hearing, Uncertainty, Inflation, Regulations: Challenges for American Agriculture, in Washington D.C. since becoming chair of the committee in January. In his opening statement Representative Thompson urged his fellow committee members to get serious about the work needed to write a bipartisan farm bill this year. The Chairman also blamed the Biden Administration for adding to the uncertainty stating it “continues to promote nonsensical regulations and policies that create needless uncertainty for farmers, ranchers, and working families, further limiting our ability to meet the growing food demands of our nation and the world”.

Witnesses included the Presidents of the American Farm Bureau Federation and the National Farmers Union along with the Presidents of the Fertilizer Institute and the National Chicken Counsel. Written testimony is found here.

Senate Agriculture Committee Reviews Conservation and Forestry Titles

The Senate Agriculture Committee reviewed the Conservation and Forestry programs administered by the Department of Agriculture. The respective USDA administrators of those programs were witnesses. Ranking Member Senator Boozman noted that conservation programs need to be locally led, voluntary and incentive based. He emphasized in his opening statement that tying crop insurance to incentives for certain conservation practices – dictated by those in Washington DC – should be off the table so we can ensure this program continues to serve as a vital risk management tool for producers.

Senator Boozman also said that all funding sources should be considered, including those provided by the Inflation Reduction Act (IRA), as Congress determines how best to bolster the farm safety net. In anticipation of the debate over the IRA funds, a coalition letter with over 600 conservation and environmental groups signing urged Congress to ensure that the upcoming Farm Bill safeguards the more than $20 billion provided by the IRA last year. Chairwoman Stabenow (D-MI) has indicated the IRA funds are not to be cut to pay for other parts of the farm bill.

UDSA Previews 2022 Rice Payments

USDA previewed plans to provide up to $250 million in assistance to rice farmers and what steps they can take to be prepared to sign up when the program is released later this spring. FSA plans to mail prefilled applications to rice producers using information on file with RMA or FSA, as reported by rice producers through their crop insurance agents or FSA county office. Details on how the payments will be structured has not yet been announced by USDA.

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