A NEW STATE LAW will regulate not only large cemeteries but also some small rural ones overseen by volunteers. .........................3
T H E O I L I N D U S T RY i s arguing nine requirements must be met before the ethanol blend level can be raised to 15 percent. ..........4
THE WHEAT SEED supply in the state is tight, and producers are being advised to place orders or get on waiting lists. .........................8
Monday, September 6, 2010
Two sections Volume 38, No. 36
Overall break preferred over conditional ‘carve-out’ BY MARTIN ROSS FarmWeek
Amid growing awareness of the acute threat a revised estate tax poses for farm families, Washington lawmakers appear more sympathetic toward ag “death tax” relief.
But Illinois Farm Bureau national legislative director Adam Nielsen argues comprehensive estate tax relief is preferable to a Senate-proposed farm family “carve-out” based on a number of specific eligibility criteria and removing producer flexibility in managing family assets. If Congress fails to act, the estate tax will return Jan. 31 at pre-2002 levels, including a $1 million individual exemption and a high 55 percent tax rate.
IFB next week will launch a phone campaign aimed at rallying support for a new $5 million individual/$10 millionper-couple exemption from estate tax liability and a 35 percent upper rate. Senate Ag Chairman Blanche Lincoln (D-Ark.) and Sen. Jon Kyl (R-Ariz.) back the measure; IFB’s campaign seeks support from Democrat Sens. Dick Durbin of Springfield and Roland Burris of Chicago. At the same time, Sen. Dianne Feinstein (D-Calif.) is sponsoring the Family Farm Estate Tax Deferral Act, which would defer family taxes as long as a farm is passed on to an individual or relative who has been “materially engaged” in its management and operation for at least five years and the heir or heirs continue to use land for farming purposes. Further, under her proposal, a farm must have generated more than 50 percent of the owner’s income or accounted for more than 50 percent of the estate at the time of death. The decedent must have owned the farm for at least five of the eight years prior to his or her death, and the decedent’s farm-related income
over the three years prior to death cannot have exceeded $750,000 annually. A “recapture” tax would be owed if land subsequently were sold outside the family or no longer used for production. Beyond setting stringent eligibility rules that could preclude relief for the producerheirs of a retired or semiretired farmer, Nielsen suggests the Feinstein bill essen-
tially would impose a “permanent easement” on heirs. Among other things, the measure would penalize farm heirs who sell selected holdings to recapitalize operations. “It really reduces landowner flexibility,” Nielsen said. “These are the kinds of bills that complicate things and don’t solve the problem. “This is a way for those who support continuation of
the estate tax in some form to try to address the concerns of farmers, but it doesn’t get at the principle of the estate tax’s unfairness or achieve our objective of avoiding the tax altogether.” The Lincoln-Kyl bill would serve not only farmers but also “the other small businesses that are so essential to a healthy rural economy,” he said.
HARVEST AT SUNSET
Dan McKinney of rural Fairfield in Wayne County was working on his first 20-acre field of corn as the sun set last week. Corn in the field had an average moisture content of 18 percent, and McKinney estimated the field would yield 135 bushels per acre. He said that would be about average for the ground he and his brother, Kelly, farm. An update on harvest activity is on page 7. (Photo by Ken Kashian)
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Mexican truck ban deemed ag trade threat U.S. pork producers are among the latest victims of a prolonged — and escalating — U.S.-Mexican dispute. Illinois corn growers and others fear a continued standoff could jeopardize their southof-the-border markets, as well. As Congress returns to the Hill, the National Pork Producers Council (NPPC) will lobby for a solution to a U.S. ban on incoming Mexican truck shipments that has sparked retaliation against a number of U.S. ag goods. In August, Mexico imposed new import tariffs on pork, cheeses, pistachios, and a range of vegetables and fruits. Under the North American Free Trade Agreement (NAFTA), Mexican carriers are
allowed to bring cargo into the U.S. In 2007, the U.S. Department of Transportation (USDOT) announced a pilot project allowing a limited number of trucks to haul loads more than 25 miles into the U.S. However, in March 2009, Congress failed to renew funding for the program, sparking a NAFTA violation ruling against the U.S. and limited retaliation against some U.S. products. As the dispute neared its first anniversary, Transportation Secretary Ray LaHood pledged to develop a plan to address the issue, but NPPC spokesman Dave Warner said pork was added to the retaliation list “to make it a little more painful” after a plan
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failed to materialize. While NPPC will seek congressional pressure for administration action, Warner told FarmWeek “Congress has been the holdup, too,” threatening to withhold funding for any project that would bring truckers over the border. Other commodity groups are concerned U.S. inaction could threaten their Mexican sales, as well. NAFTA eliminated Mexican tariffs on U.S. ag goods, and in 2009, the U.S. exported 503,000-plus metric tons of pork worth more than $762 million to Mexico, making it U.S. pork producers’ No. 2 market. Mexico also is a key market for Midwest yellow corn, largely
railed through Texas. “Twenty-five percent of the corn Mexico uses comes from that State of Illinois,” Illinois Corn Marketing Board valueenhanced project director Philip Thornton noted. “This could be very important to us — it’s a very important market.” While the trucking standoff is snarled in border security politics, Illinois Farm Bureau national legislative director Adam Nielsen sees it feeding a potentially larger problem for U.S. exporters — continued trust in U.S. compliance with key trade agreements. “How can we expect others to comply if we’re not complying?” Nielsen posed. — Martin Ross
Illinois Farm Bureau®on the web: www.ilfb.org