GROWMARK donated $75,000 for the Illinois Agriculture in the Classroom program and encouraged its employees to buy special license plates to help the program. ................2
A MediCARe suRTAx to be applied on Jan.1 may affect many landowners who cash rent their land and thus do not materially participate in their farming operation. ......4
A POssible ReduCTiON in barge shipments or temporary closure of the Mississippi River between St. Louis and Cairo could have serious effects on the ag economy. .........5
Monday, November 19, 2012
Two sections Volume 40, No. 47
‘Fiscal cliff ’ debate has far-reaching implications BY MARTIN ROSS FarmWeek
Periodicals: Time Valued
As they peer into the uncertain landscape beyond the socalled “fiscal cliff,” farmers, manufacturers, dealers, and analysts fear one of the U.S.’ continued economic bright spots — agriculture — could flicker or fade. That’s a dark prospect for rural families and businesses, their communities, and workers who supply the sector, Illinois Farm Bureau President Philip Nelson warns. That’s not to mention the production, distribution, and urban retail labor force that depends on consumer confidence and disposable income
for their livelihoods. Congressional tax and spending decisions over the next month could determine the future of homegrown fuels and consumer fuel prices and even affect the quality of the environment nationwide. Lawmakers returned to Capitol Hill last week to consider lame duck measures aimed at averting severe fiscal mandates set to kick in in January and address a raft of expiring Bushera, Obama stimulus-directed, and bioenergy tax provisions. Nelson urged House Speaker John Boehner (R-Ohio) to provide “at least some assurance from Congress as it relates to taxes.” He cited concerns about pending expiration of capital expensing/first-year bonus depreciation incentives and temporary estate tax and middle-income Alternate Minimum Tax (AMT) relief measures and possible loss of nextgeneration ethanol, biodiesel, and wind energy credits. All are vital to the economy “because they touch so many
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facets of it,” Nelson argued. “We’re a part of the whole picture,” he noted. “When farmers have a good year, they tend to spend money. That stimulates the economy, whether they buy equipment, they buy farmland, or they buy a pickup truck. “And they’ve utilized some of these tax provisions in the past. Farm equipment dealers are very worried with the (Section 179 capital) expensing option rolling back from $139,000 this year to $25,000 next year.” Confidence and construction Economists at a recent ag bankers conference stressed the connection between consumer confidence and potential
demand and, by extension, investment and growth. Andrew Busch of Chicagobased BMO Capital Markets sees vast untapped growth potential — an estimated $1.4 trillion in excess U.S. bank reserves and $500 billion in private pension fund liquidity. But with consumer confidence still waning, “we have a long way to go toward unleashing that potential,” he advised. Whatever the true import of fiscal debate, economic consultant Ross Korves argues “consumers are convinced it’s a big issue.” Congressional policy and tax gridlock “give businesses and consumers no confidence they can get anything
accomplished,” said IFB Vice President Rich Guebert Jr. Taxing concerns According to Busch, the U.S. edge over European economies lies in “super, fast-growing” smaller businesses that add and retain domestic jobs and pay U.S. taxes. Korves warns increased tax liability “directly impacts economic activity.” He noted a potential jump in the current 15 percent capital gains tax rate, interest rate hikes, a possible average 10 percent income tax bump, and a “huge jump” in households required to pay AMT taxes. See Cliff, page 3
Nelson: Pick up a phone Now that lawmakers are back in the House, Illinois Farm Bureau President Philip Nelson urged farmers to give them a call on behalf of lame duck farm bill passage. Last week, IFB issued an action request asking members to contact lawmakers toll-free at 1877-422-8424. The Illinois Corn Growers Association and the Illinois Soybean Association also have intensified a member push for a “farm bill now.” “We want everyone to take time to pick up the phone,” Nelson stressed. “We’re trying to put pressure on (House Speaker) John Boehner (R-Ohio) to schedule time to take up the floor debate in the House.”
FarmWeek on the web: FarmWeekNow.com
Nelson cited “mixed signals” from House leadership regarding prospects for lame duck floor debate vs. a mere one-year extension of currently expired 2008 provisions. In a Web chat last week, American Farm Bureau Federation farm policy specialist Mary Kay Thatcher said she saw about a 15 percent chance Congress would pass a farm bill by year’s end. The most likely scenario is a one-year extension, “although there is also talk of a six-month extension,” Thatcher said. “Either way, writing the bill next year will be more difficult than this year, as there will be less money available to write a bill with a good safety net,” she said. — Martin Ross
Illinois Farm Bureau®on the web: www.ilfb.org