August 18, 2010
www.gfb.org
Vol. 28 No. 33
FEINSTEIN BILL CALLS FOR ESTATE TAX DEFERMENT Sen. Dianne Feinstein (D-Calif.) is proposing the deferral of estate taxes under certain conditions in the Family Farm Estate Tax Deferral Act of 2010 (S. 3664), the latest congressional attempt to address the estate tax issue beyond 2010. The estate tax in 2010 is zero, but without congressional intervention, the federal estate tax will revert in 2011 to what it was before 2001, with a top tax rate of 55 percent and a $1 million exemption. Both the House and Senate are in recess until Sept. 13. The House is expected to adjourn Oct. 8, while the Senate has yet to set a target adjournment date. Feinstein’s bill would defer estate taxes on farms and ranches if a number of requirements are met, including that the farm must be passed on to a family member who has been materially engaged in its management and operation for at least five years, and the heirs must continue to use the land for farming purposes. The bill also requires that farm-related income of the person who dies not exceed $750,000 in any of the last three years of his or her life. Under the provisions of the Feinstein bill, if the inherited farm or ranch is sold outside the family or no longer used for farming or ranching, a “recapture tax” would be owed. The tax would be based on the value of the estate or property at the time the property is sold or ceases to be used for agriculture. The sale of timber or a conservation easement would not be subject to the recapture tax. The Feinstein bill is similar to the Family Farm Preservation and Conservation Estate Tax Act (H.R. 3524), introduced in the House last year by Rep. Mike Thompson (DCalif). Feinstein’s bill would require difficult estate-tax planning. For example, because material participation is required, a farmer no longer actively participating in the farm operation because of disability or retirement or because he rents out the land might no longer be eligible for the tax deferment. Farm Bureau continues to advocate a permanent repeal of the estate tax, and until that occurs supports a higher exemption level that is indexed to inflation. Farm Bureau supports a proposal by Sens. Blanche Lincoln (D-Ark.) and Jon Kyl (R-Ariz.) to set the estate tax exemption rate at $5 million with a 35 percent maximum tax rate. The proposal was submitted by Lincoln and Kyl as an amendment to the Small Business Jobs Act of 2010 (H.R. 5297), one of several amendments that have been blocked by Senate Democrats. The Lincoln-Kyl amendment gives simple “no strings attached” estate tax relief.
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SEPT. 30 IS DEADLINE TO APPLY FOR SURE PAYMENTS Producers have until Sept. 30 to apply for payment under the 2008 Supplemental Revenue Assistance Payments (SURE) program, which provides financial assistance for crop production and/or quality losses due to a natural disaster during the 2008 crop year. SURE provides assistance in an amount equal to 60 percent of the difference between the SURE farm guarantee and total farm revenue. To be eligible, producers must have suffered at least a 10 percent loss in production on a crop of economic significance and must meet the risk management purchase requirement. In addition, the property where the loss occurred must be in a county that was declared a primary disaster county or contiguous county in 2008. In Georgia, 158 of 159 counties received disaster designation and the vast majority of them were primary disaster counties. McIntosh County on the coast was the only county in the state not to receive a disaster designation. Regardless of the county designation, producers whose production fell below 50 percent of their normal production due to a natural disaster may be eligible for SURE payments. The Farm Service Agency (FSA) began accepting SURE applications in January, and the American Recovery and Reinvestment Act of 2009 allowed a one-time increase in the calculation for applications filed by Sept. 30. The USDA is encouraging producers to file whether they think they qualify or not. Applications may be filed at your local FSA office. USDA FORECASTS 18 PERCENT RISE IN GA. COTTON PRODUCTION Georgia’s cotton production is expected to increase by 18 percent in 2010, according to forecasts from the United States Department of Agriculture’s (USDA’s) National Agricultural Statistics Service (NASS), part of an expected 52 percent increase in cotton production nationwide. Cotton, Georgia’s third-largest commodity, is expected to be harvested from 1.24 million acres in Georgia in 2010, up from 990,000 acres in 2009. While the yields are expected to decline by six percent, overall production is anticipated to increase by 360,000 bales, from 1.86 million bales in 2009 to 2.2 million this year. Nationwide, an additional 3 million acres of cotton will be harvested, and the NASS forecast the 2010 production at 18.5 million bales, up from 12.2 million in 2009, an increase of 52 percent. Hay production in Georgia is also expected to increase significantly, though producers are harvesting the same number of acres. Hay production is forecast at 1.89 million pounds in 2010, up from 1.61 million pounds in 2009. Peanut production is expected to rise 3 percent, from 1.78 billion pounds to 1.83 billion pounds. Georgia’s corn for grain production is anticipated to fall by 20 percent, from 51.8 million bushels in 2009 to 41.4 million, owing to a 19 percent reduction in acreage. Oats and sorghum for grain are expected to stay virtually the same in 2010 as in 2009. Significant reductions in harvested acreage are expected to result in decreased production in soybeans (down 29 percent), tobacco (down 12 percent) and winter wheat (down 45 percent). Tobacco yields are forecast for a 13 percent increase but production in Georgia is expected to fall from 28 million pounds to 24.75 million, or 12 percent, which mirrors the national forecast.
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GRASSLEY, FEINGOLD INTRODUCE BILL TO LIMIT FARM PAYMENTS Sen. Chuck Grassley (R-Iowa) has again introduced legislation that would cap farm payments at $250,000 per entity as a means to reducing the federal budget deficit, though he does not expect the Senate to take immediate action on it. The Rural America Preservation Act (S. 3701), which was cosponsored by Sen. Russ Feingold (D-Wisc.), proposes limits of $40,000 on direct payments, $60,000 on counter-cyclical payments and $150,000 on loan deficiency payments and marketing loan gains, including gains on generic certificates and forfeited commodities. According to the United States Department of Agriculture, the 2008 farm bill imposed a $40,000 limit on direct payments, excluding peanuts. Counter-cyclical payments were capped at $65,000, excluding peanuts. The 2008 farm bill does not impose limits on payments for loan deficiency and marketing loan gains. The bill also includes an “active farmer” requirement which the two senators said will ensure that the recipients are actively engaged in farming and prevent large agribusinesses and non-farmers from receiving federal payments that might otherwise benefit small- and medium-sized farms. Farm Bureau opposes farm program payment limitations. According to press releases from both senators, the bill would trim farm payments by $1 billion over 10 years. Grassley has made proposals that payment limits be included in the last two farm bills, but neither made it to the final legislation. He said this latest proposal was introduced well in advance of the 2012 farm bill deliberation to let people know that he’s not giving up on his plans to limit farm payments as a means to cut the deficit. GEORGIA FARM REAL ESTATE VALUES FALL Farm real estate values in Georgia fell by nearly 5 percent from 2009 to 2010 while farm land average rent per acre rose by 5 percent, according to a report from the United States Department of Agriculture’s (USDA) National Agriculture Statistics Service (NASS). The farm real estate average value in Georgia was $3,900 per acre in 2010, down from $4,100 in 2009. The drop in value contrasted with the national average, which grew by 1 percent, but Georgia farm real estate value is still 82 percent higher than the national average, which is $2,140 per acre for 2010. Cropland average value in the state fell from $4,050 to $3,690 (9 percent), compared with a 1 percent rise nationally ($2,670 in 2009 to $2,700 in 2010). Georgia’s nonirrigated cropland values fell 10 percent from $4,200 to $3,800. Georgia’s pasture average value fell 10 percent from $6,000 to $5,400, while the national average stayed the same at $1,070 per acre. Average rent per acre of Georgia farmland grew from $76.50 in 2009 to $80 in 2010. Rents on cropland nationwide rose from $99 to $102 per acre. Rent on irrigated land fell from $143 to $141, while non-irrigated land gained in value from $49 to $51. The average rent on pasture in 2010 is $24 per acre, down from $25 last year, a fall of 4 percent. Nationwide, rent on pasture remained at $11 per acre.
Leadership Alert page 4 of 4 UPCOMING EVENTS
USDA ANIMAL DISEASE TRACEABILITY MEETING Aug. 20 Doubletree Hotel Atlanta Airport 3400 Norman Berry Dr. Atlanta USDA is hosting public meetings to discuss animal disease traceability. Public meetings will take place from 8 a.m. to 4 p.m. local time, with registration beginning at 7 a.m. Contact traceability@aphis.usda.gov for more information. DAIRY NUTRIENT MANAGEMENT RECORD-KEEPING WORKSHOP Aug. 24 Greene County Extension Office Greensboro This training, which runs from 9:45 a.m. to 1 p.m., will be offered simultaneously in English and Spanish for dairy producers and workers. Topics include purpose of nutrient management plans, overview of record keeping, and record-keeping forms for dairy workers. Lunch will be provided. Please RSVP by Aug. 20 by calling the Greene County Extension Office at 706-453-2083.
COTTON, PEANUTS AND SOYBEAN FIELD DAY August 26 Southwest Georgia Research and Educational Center Plains Event begins at 8:30 am. Lunch will be provided. Call 229-824-4375 for more information. CROP INSURANCE LISTENING SESSION Aug. 27 UGA Tifton Campus Conference Center Auditorium Tifton Sen. Saxby Chambliss has invited USDA Risk Management Agency Administrator Bill Murphy to meet with farmers to discuss their crop insurance concerns from 1-3 p.m. The UGA Tifton Campus Conference Center is located at 15 RDC Road (I-75, exit 64). For more information about the meetings, contact Sen. Chambliss’ Moultrie office at 229-985-2112. PROGRESSIVE AGRICULTURE SAFETY DAY Aug. 28 Habersham County Fairgrounds Clarkesville This event, which lasts from 8 a.m. to 5 p.m., is open to children ages 5 – 13. For information or to register please contact the Habersham County Farm Bureau at 706-776-6739 or jhcanup@gfb.org. GEORGIA DEPARTMENT OF AGRICULTURE EQUINE AUCTION Aug. 28 Happy Valley Stables Thomson The Georgia Department of Agriculture will conduct a live auction of 16 horses. Inspection begins at 10 a.m. Sale starts at 11 a.m. For information, call 404-323-9340 or 706-968-5212.
PESTICIDE USE, SAFETY AND HANDLING TRAINING Sept. 2 Dougherty County Cooperative Extension Office Albany Participants can earn five hours of commercial pesticide credit in multiple categories. Course begins at 8:30 a.m. and ends at 4 p.m. Cost is $40. For more information, visit www.ugaextension.com/Houston or contact Karen Atkins at 478-987-2028 or atkinsk@uga.edu. AG COMMISSIONER CANDIDATES’ SUSTAINABILITY DEBATE Sept. 2 Tull Auditorium, Emory University Atlanta Agriculture Commissioner Candidates Gary Black, Kevin Cherry and J.B. Powell will discuss issues related to sustainable agriculture. Debate runs from 7:30 p.m. to 9 p.m. Admission is free but limited to 300. For more information and to RSVP, visit http://www.georgiaorganics.org/events/event.php?id=1265.