A Farmer’s Guide to the
August recess is no time to play around —By Jay A. Wood Public Relations Team Although federal lawmakers spend most months working in Washington, D.C., August is dedicated each year to returning home to meet with constituents. This narrow window, commonly known as “August recess,” is a critical time for Indiana Farm Bureau members to meet face-to-face with their congressman/woman and senators. Making in-person contact with lawmakers increases familiarity and trust, which can pay dividends later. “In both politics and policy, relationships are everything,” said Kyle Cline, INFB’s national policy advisor. “When Farm Bureau members create and strengthen bonds with their lawmakers, our organization is in a better position to achieve its legislative priorities.” This August is a particularly opportune time because 2016 is an election year. Although Sens. Coats and Donnelly are not on the ballot this fall, the majority of Indiana’s incumbent representatives will be (in their current capacity or another). INFB members should capitalize on the fact that those individuals will have an increased presence around their community, and will be listening more closely than ever to the concerns of their constituents. While the congressional delegation is home from Washington D.C., it is crucial for INFB members to highlight three Farm Bureau pri-
ority issues: • Trade (specifically passage of TPP). • Tax reform. • Regulatory reform. Background information on these issues is included in this insert. Farm Bureau is working toward a vote on TPP later this year. Tax and regulatory reform are issues the organization is laying the foundation for now, with expectation of action next year. Although the majority of Indiana’s congressional districts include heavily rural areas, not every officeholder has a personal or professional background in agriculture. It is all the more important, then, that INFB members meet with their federal lawmakers during August recess so that farmers and rural residents’ voices are part of the policy discussion. As the common saying goes, “if you are not at the table, you are likely on the menu.” The July 11 edition of The Hoosier Farmer included an insert with tips for grassroots member
August Recess
lobbying. These basic techniques can be applied when meeting with federal lawmakers during August recess as well as future meetings Farm Bureau members may have with other legislators. The Hoosier Farmer insert in your hands today highlights the federal priority issues that INFB members are encouraged to discuss with the congressional delegation. It also includes time and location information for August recess meetings. Farm Bureau members
are encouraged to attend the meeting in their area with their member of Congress. The time is now for members to ramp up their civic and political engagement at the federal level. Effective grassroots advocacy can tip the scale Farm Bureau’s way in the public policy arena. Armed with the what, when, where, why and how, INFB members will be fully prepared for success during August recess.
INFB’s priorities for this year’s August recess are: International trade
Selling more agricultural goods around the world boosts farm profitability and benefits rural communities. Passage of the Trans-Pacific Partnership (or TPP) is expected to increase cash receipts and net exports from Indiana by $196 million and $98.3 million respectively.
Regulatory reform
All Americans, including Hoosier farmers, need a regulatory system that is fair, takes economic impacts into account, is based on sound, peer-reviewed scientific data, and respects our freedoms.
Tax reform
Farm Bureau supports replacing the current federal income tax with a fair and equitable tax system that encourages success, savings, investment and entrepreneurship. Tax reform should help all types of farm businesses, preserve cash accounting, repeal estate taxes, and lower capital investment taxes for farmers.
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Congress could soon vote on important trade agreement International trade • Congressional approval of the Trans-Pacific Partnership agreement will increase net farm income by $4.4 billion nationally, according to AFBF. • Direct U.S. agricultural exports are expected to increase $5.3 billion per year with TPP. • TPP would increase cash receipts and net exports from Indiana by $196 million and $98.3 million per year respectively, with noticeable gains for the soybean, pork, and beef sectors. • Increased economic activity from TPP is expected to result in 740 new jobs in Indiana.
For the latest information from AFBF on TPP and how it will benefit agriculture: http://tpp.fb.org/.
—By Kathleen M. Dutro Public Relations Team Despite all the election-year rhetoric, trade plays a very important role in the viability and success of Indiana farms – and other Indiana businesses, too. Indiana ranks 8th among the 50 states in the value of its agricultural exports, which were valued at $5.7 billion annually as of 2014, according to the USDA’s Economic Research Service. Those exports support roughly 36,200 jobs. “Nearly 1 out of every 3 acres of soybeans planted in Indiana are destined for export markets,” noted Kyle Cline, Indiana Farm Bureau’s national government relations policy advisor. “Our farmers are very good at what they do, but without additional market opportunities, future expansion will be severely limited. This is especially important given the current commodity market scenario.” The U.S. Chamber of Commerce says more than 800,000 Indiana jobs, particularly in the auto sector, depend on trade and that the state’s exports have approached $50 billion annually in recent years. It is because of the economic importance of trade that Indiana Farm Bureau and the American Farm Bureau Federation have taken such a strong stance in favor of the Trans-Pacific Partnership. Farm Bureau is hoping the
‘The TPP agreement is expected to increase cash receipts and net exports from Indiana by $196 million and $98.3 million per year respectively. It is estimated that the increased marketing opportunities for Indiana’s farmers and ranchers will add more than 740 jobs to the Indiana economy. Eliminating tariffs and other trade barriers on Indiana’s agricultural exports to TPP-partner countries will increase trade for a range of Indiana agricultural products, including pork, soybeans, beef, and processed food products. Export sales make an important contribution to Indiana’s farm economy, which had total cash receipts of $13 billion in 2014.’ —AFBF study
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Indiana's gains from full implementation of TPP Agricultural product Corn Soybeans, soybean products Wheat Fruits and nuts Vegetables Beef Pork Poultry Dairy Other ag products TOTAL
Cash receipts (annual) $41,192,600 $40,426,900 $329,400 $347,800 $2,920,200 $7,778,600 $61,800,300 $17,101,800 $5,111,700 $19,025,400 $196,034,700
Net exports (annual) -$5,517,000 $22,668,200 -$148,100 $309,500 $2,599,000 $7,173,900 $53,181,400 $4,602,300 $2,435,000 $10,965,400 $98,269,700
Estimates courtesy of the American Farm Bureau Federation
agreement will be approved by Congress during the post-election lame-duck session. The August recess is therefore a great time for Farm Bureau members to ask their members of Congress to vote in favor of TPP, Cline said. Here are the benefits, according to AFBF: Full implementation of TPP will result in an annual increase in net farm income of $4.4 billion, driven by an increase of direct U.S. ag exports of $5.3 billion per year. In Indiana alone, the agreement is projected to increase cash receipts by $196 million and net exports by $98.3 million annually. TPP is what is known as a “multilateral agreement.” A “multilateral agreement” involves three or more parties, and TPP is intended to create high-quality rules and market access across its 12 members: Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and the United States. The U.S. already has trade agreements with Australia, Canada, Chile, Mexico, Singapore and Peru, but the agreement substantially lowers tariffs and other trade barriers with other member coun-
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tries. It also updates some of the previous agreements. Free trade agreements have been very effective in the past for agriculture, Cline noted. “We have seen positive gains in prices and expansion for the American farmer in nearly every free trade agreement ratified in recent past,” he said. “Outside of TPP, other member countries would – and indeed are – already negotiating and implementing bilateral agreements without waiting for the United States to complete action,” AFBF says in its analysis of the agreement. “Other countries will move forward with their trade capabilities regardless of whether or not the United States decides to ratify the agreement.” AFBF’s analysis indicates that congressional passage of the agreement would boost net farm income by $4.4 billion over levels expected if Congress fails to ratify TPP. “U.S. failure to enact TPP will not see our trade situation stay the same, but will lead to declining net exports and market share in important markets,” AFBF concludes.
Indiana
Trans-Pacific Partnership (TPP)
The Trans-Pacific Partnership (TPP) will boost demand for U.S. farm and food products among nearly 500 million consumers in 11 countries across the Asia-Pacific region. By reducing tariffs and opening new markets for American agricultural products, the TPP will help increase farm income, generate rural economic activity, and support local jobs.
Top 5
United States Department of Agriculture Foreign Agricultural Service
Indiana
Indiana Agricultural Exports
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Trans-Pacific Partnership (TPP)
Soybeans Corn Feeds and Fodder Pork Dairy
The Trans-Pacific Partnership (TPP) will boost demand for U.S. farm and food products nearly 500 million consumers in(TPP) 11 countries across the Asia-Pacific Theamong Trans-Pacific Partnership will boost region. By reducing tariffs and opening new markets for American agricultural demand forhelp U.S. farmfarm and food products among products, the TPP will increase income, generate rural economic activity, and support local jobs. nearly 500 million consumers in 11 countries
across the Asia-Pacific region. By reducing tariffs and opening new markets for American agricultural products, the TPP will help increase farm income, generate rural economic activity, Indiana and support local jobs. Agricultural Exports
Top 5
43,200
$5.7 billion
Indiana jobs supported by agricultural exports
Annual value of Indiana agricultural exports
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Soybeans Corn Feeds and Fodder Pork Dairy
1 2 3 4 5 that makes it take longer and cost
1 2 3 4 5
Source: USDA-ERS 2014 State Export Data
TPP Highlights Soybeans
Regulatory system in need of ‘comprehensive reform’ —By Kyle Cline Public Policy Team
more to bring new, potentially safer pesticides to market. Farm Bureau has been working Farm Bureau believes that all hard to push back these onerAmericans, including Hoosier ous rules one by one, with some farmers, need a regulatory system Annual value of Indiana Indiana jobs supported by level of success. However, that is fair, takes economic imagricultural exports to agricultural exports accomplish our stated goal of a pacts into account, is based on regulatory system that is fair, takes sound science, and respects our Source: USDA-ERS 2014 State Export Data economic impacts into account, freedoms. Unfortunately, our curis based on science, and respects rentTPP regulatory system is none of Highlights our freedoms, we need comprethose things. Soybeans hensive reform of the entire sysThere are several recent exTariffs are already low in TPP markets, but soybean producers tem. amples of government overreach will benefit from reduced meat tariffs that are expected to create What does that mean? and abusesnew of the regulatory feed demand. Japan, Malaysia, and Vietnam will eliminate • Regulations should be based on system thattariffs confirm this, includon soybean oil and soybean meal. scientific analysis. ing the Waters of the U.S. rule; Corn • They should faceproducers a cost-benefit the Chesapeake Bay water rules; Tariffs are already low in TPP markets, but corn will test to ensure they worth misuse of the Endangered Species benefit from reduced meat tariffs that are expectedare to create theVietnam toll theywill take on businesses, Act; greenhouse gas demand. restrictions new feed Malaysia and eliminate tariffs farms and jobs. that will raise farmers’ costs; duwithin 5 years. • We need to limit how agenplicative regulation Pork of pesticide cies use social media other applications under two separate Japan will eliminate duties on nearly 80% of tariff lines,and including public relations tactics to lobby laws; unnecessary, unscheduled processed pork. Remaining tariffs will be cut and the “Gate for Nearly their own rules. reviews of products that significantly farmers altered. Price” system all Malaysian tariffs will bepests locked in at 0% and • Vietnam will eliminate tariffs.and conWe need transparency need to manage and weeds; gressional oversight to ensure and a tortuous approval process Dairy
43,200
$5.7 billion
Tariffs are already low in TPP markets, but soybean producers will benefit from reduced meat tariffs that are expected to create new feed demand. Japan, Malaysia, and Vietnam will eliminate tariffs soybean oil and soybean meal. that agencies areonnot cherry-
Regulatory reform
Corn or scientific picking economic already findings to Tariffs justifyare what theylow in TPP markets, but corn producers will benefit from reduced meat tariffs that are expected to create want to do. new feed demand. Malaysia and Vietnam will eliminate tariffs • Much of the regulatory within 5 years. process is governed by the AdministraPork Farm Bureau: tive Procedure a law that JapanAct, will eliminate duties on nearly 80% of tariff lines, including hasn’t seenprocessed any major reform pork. Remaining tariffs will be cut and the “Gate • Opposes regulatorytariffs exsystem altered. Nearly all Malaysian since it wasPrice” enacted insignificantly 1946. will be locked in at 0% and Vietnam will eliminate tariffs. pansion including the Our society, our government Dairy EPA’s attempts to exceed and our technology have will eliminate tariffs on cheese whey andauthority create theand legislative changed aJapan lot since then. After tariff-rate quotas (TRQs) for whey, butter, milk powder, and provided to them by Con70 years, it’s time forand an condensed overevaporated milk. Malaysia and Vietnam will in will theeliminate Clean Water haul. eliminate tariffs on dairy products. gress Canada tariffs Act fluid and milk, Clean Airand Act proon whey and needs create TRQs butter Indiana Farm Bureau you for cheese, other products. grams. to speak up for Hoosier farmers and demand comprehensive regu• Supports additional conlatory reform. A great way to do gressional oversight of this is to contact your members of federal agencies and their Congress during this year’s August regulatory actions. recess period and let them know how this impacts your farm. • Advocates for legislation To learn more about Farm Buthat preserves farmers’ reau’s regulatory reform priorities land-use and water rights. and to get involved in the INFB August recess campaign, please visit our website, www.infb.org.
Japan will eliminate tariffs on cheese and whey and create tariff-rate quotas (TRQs) for whey, butter, milk powder, and evaporated and condensed milk. Malaysia and Vietnam will eliminate tariffs on dairy products. Canada will eliminate tariffs www.thehoosierfarmer.com on whey and create TRQs for cheese, fluid milk, butter and other products.
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Tax reform efforts underway in Congress —By Jay A. Wood Public Relations Team
Tax reform • Farm Bureau’s overarching principals for tax reform: • Include and help all farm businesses, such as soleproprietors, partnerships, sub-S and C corporations. • Reduce rates low enough to account for any deductions/credits lost due to base broadening.
House Speaker Paul Ryan and the House Republican Conference recently unveiled their 2017 agenda, called “A Better Way.” Among the items in Ryan’s agenda, Farm Bureau is particularly interested in the tax reform section. The plan stresses three major themes: • Simplicity and fairness. • Jobs and growth. • A service-first IRS. AFBF thanked House Republicans for their dedicated effort to simplifying and streamlining the tax code and pledged to take a serious look at their proposal, which will require careful analysis. AFBF President Zippy Duvall issued a statement saying, “Speaker Ryan…and House Republicans are to be commended for devel-
oping a blueprint for rewriting of our nation’s cumbersome, convoluted and complex tax code. Farm Bureau is very pleased to see the plan includes several very important features for farmers and ranchers including full expensing, exclusions for capital gains and repeal of the estate tax.” The plan highlights a desire to create more certainty by eliminating the estate tax, which can take up to 40 percent of the assets of a family business when the owner dies. AFBF policy supports the elimination of the estate tax. During August recess meetings, INFB members are encouraged to find out where their member of Congress stands on the Ryan tax reform plan, particularly on the estate tax repeal. Let them know how these issues affect your farm. Members are also encouraged to raise other Farm Bureau priority
• Repeal estate taxes and continue stepped-up basis. • Lower taxes on capital investments. Capital gains taxes should not be levied on transfers at death. • Allow businesses to deduct expenses when incurred. Cash accounting should continue. • Simplify the tax code to reduce the tax compliance burden.
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tax issues, including the importance of cash accounting to their operations and the diversity of business structures used in agriculture. Effective grassroots advocacy involves not only sharing Farm Bureau’s priorities, but also listening to the response. When discussing tax reform with federal lawmakers this month and beyond, members have an opportunity to better understand the political and public policymaking processes, including various pressures, motivations and other factors that influence their lawmakers’ legislative decisions. Meeting or communicating with legislators on a regular basis will help members tune in to these processes, and it will enable them to be more effective Farm Bureau advocates while building strong working relationships.