TheFirstFurrow

Stick with us here. Most people probably understand the wisdom, or can at least appreciate the purpose, of maintaining your home. Over time your home gets cluttered, things break, and some of those deep, dark corners you never visit have to be dealt with. It’s not always a fun job, but doing it can make your home a more enjoyable place to live.

North Carolina’s statutes, just like a home, require ongoing maintenance. So it’s necessary, on occasion, for the Legislature to take a look at our statutes and clean up some of the confusing, unhelpful, and out-of-date provisions.

That’s where the annual Farm Act comes into play. Each year since 2013 state legislators have passed a Farm Act to make necessary changes to the law to better serve North Carolina’s farmers.

In the past, the Farm Act has addressed wide-ranging aspects of agriculture including transportation, legal liability, deregulation, clarifying terms and interpretation of federal laws, amongst many more.

The 2018 Farm Act is sponsored by Senators Brent Jackson, Bill Cook, and Norman Sanderson. Let’s get to the bill’s highlights:

Right-to-Farm

Last year we wrote about a serious threat to North Carolina’s ag economy: the arrival in 2013 of a group of out-of-state lawyers who make a living suing animal ag operations for nuisance. Fast forward five years. The cases developed and the court heard the first “bellwether” trial in April of this year. Unfortunately, it resulted in a $50 million damage award against Smithfield.

Of similar concern, several months before the first trial began a federal district court judge issued a ruling in the case that eviscerated North Carolina’s Right-to-Farm law, which protects every North Carolina farmer from nuisance lawsuits under certain conditions. The judge wrongly concluded that a farm isn’t protected by the law even when a plaintiff moves near the farm after it was established.

In response, S. 711 strengthens the Right-to-Farm defense and attempts to discourage future copycat lawsuits before they are filed.

Milk Labeling

In an effort to assist the struggling dairy industry and protect product integrity, the bill would direct the Food and Drug Protection Division of the Department of Agriculture and Consumer Services to immediately develop an enforcement plan to enforce the United States Food and Drug Administration’s standard of identity for milk. This would prohibit the sale of plant-based products mislabeled as milk, such as soy milk and almond milk. Enforcement could include notification of the Department’s intent to embargo all mislabeled products offered for sale in the State.

Farm Equipment Property Tax

The bill would require counties that use the “cost approach” in appraising farm equipment to use a standard depreciation schedule published by the N.C. Department of Revenue. The Department of Revenue must publish a depreciation schedule for farm equipment and make the schedule electronically available on its website. This ensures that depreciation schedules will be consistent across the state.

Additional Studies

The bill would instruct the Agriculture and Forestry Awareness Study Commission to study: (i) requiring the holders of unused rights-of-way and utility easements to offer the easements to the underlying property owners for fair market value; and (ii) the exclusion of property enrolled in the present use value taxation program from rural fire protection district and county service district taxes.

North Carolina has a rich agricultural tradition, and despite the growth of other industries in our state agriculture remains the state’s leading economic driver. That’s why the Farm Act is such an important piece of legislation, and one that North Carolina Farm Bureau supports wholeheartedly.

April is here, and with it comes warmer weather, spring break vacations, . . . and taxes. Yes, we hate to bring it up but Tax Day is just around the corner — April 17th to be exact — so we thought we’d look a little closer at some of the finer points of the tax reform law that Congress passed a few months ago. We’ve fired a handful of questions to Pat Wolff, Senior Director of Congressional Relations for American Farm Bureau Federation, and she’s given us the inside scoop on what’s new with taxes and what’s on the horizon.

Question #1: The Tax Cuts and Jobs Act is a comprehensive law, making changes to the nation’s tax policies that impact practically every individual and business in the US. Which provisions do you think are most important for North Carolina farmers and how does this reform package help them going forward?

The cornerstone of tax reform is lower tax rates for individuals and businesses. For farmers that means being about to keep more of their money to reinvest in their operations. Farms that pass profits through to their owners for taxation (sole-proprietorships, partnerships and under Subchapter S) will be taxed from zero to 37 percent with that top rate kicking in at $600,000 of income. That’s compared to the old law where the top rate of 39 percent used to start when income exceeded $470,000. The top corporate tax rate permanently shrinks from 35 percent to 21 percent.

Expanded deductions will allow farmers to write off more of their expenses immediately. This will make it easier to reduce taxable income by matching income with offsetting expenses. Section 179 small business expensing is permanently doubled to $1 million. There are no limits on bonus depreciation. And almost all farm businesses get to keep using cash accounting and deduct their interest expenses and property taxes.

Question #2: The reduction in the corporate tax rate has gotten a lot of attention, but the majority of North Carolina farms are family-owned sole proprietorships and partnerships. Are there any provisions in the new tax law that will help family-owned sole proprietorships and partnerships?

Tax reform provides a new business deduction that is available only to sole-proprietorships, partnerships and those that pay taxes under Subchapter S. Individuals operating pass-through businesses will be able to take a tax deduction equal to 20 percent of net farm income with limitations if taxable income exceeds $315,000 for a couple.

Question #3: Considering that most farms have little liquidity and their capital is usually tied up in the land and farm equipment, why was it important that Congress expand the estate tax exemption level?

Via American Farm Bureau Federation

On January 8 President Donald Trump unveiled a major initiative designed to strengthen a rural economy that has lagged urban areas in recovery from the Great Recession of 2007-2008. Trump signed two executive orders that fund and streamline the expansion of rural broadband access after an address to 7,400 farmers and ranchers gathered at American Farm Bureau Federation’s 2018 Annual Convention.

In addition to economic development, Trump touched on issues of particular importance to agriculturists such as regulations, labor and trade. He praised farmers for their enduring values. “We are witnessing a new era of patriotism, prosperity and pride—and at the forefront of this exciting new chapter is the great American farmer.” Farmers, Trump said, “embody the values of hard work, grit, self-reliance and sheer determination.”

The president spent much of his address decrying the costs of excessive regulation and tallying the rules his administration has moved to eliminate.

“We are also putting an end to the regulatory assault on your way of life. And it was an assault,” he said. Trump singled out the Waters of the United States rule, now being withdrawn following an executive order he signed in the first weeks of his administration. “It sounds so nice, it sounds so innocent, and it was a disaster. People came to me about it and they were crying – men who were tough and strong, women who were tough and strong – because I gave them back their property and I gave them back their farms. We ditched the rule.”

Trump acknowledged controversy over the North American Free Trade Agreement and other trade agreements that account for roughly a quarter of U.S. agriculture revenues. “To level the playing field for all of our farmers and ranchers as well as our manufacturers we are reviewing all of our trade agreements,” he said. “On NAFTA I am working very hard to get a better deal for our farmers and ranchers and manufacturers.”

Trump promised the farm bill would continue to lend stability to farmers who are now entering their fifth year of declining incomes. “I look forward to working with Congress to pass the farm bill on time so that it delivers for all of you, and I support a bill that includes crop insurance,” he said.

AFBF President Zippy Duvall said Trump’s visit marked a watershed in D.C. politics.

“Farmers and ranchers have too long faced burdensome regulations,” Duvall said. “This president understands the toll government overreach has taken on ordinary business and is moving swiftly to clear the way for prosperity. We are moving into yet another year of economic difficulty. Relief could not have come at a better time.”

The NC General Assembly adjourned (again) a couple weeks ago, and with November officially upon us it’s probably as good a time as any to put a bow on this year’s legislative session. Overall, it was a good session for North Carolina agriculture, with the General Assembly enacting several important measures to help farmers. Today, we want to give you a quick overview of a few key legislative actions.

Brent Jackson was elected to the North Carolina Senate in 2010 and is currently serving his fourth term representing Duplin, Johnston, and Sampson counties. He is the co-chairman of the Senate Appropriations/Base Budget Committee and serves on numerous other committees as well.

Jackson and his wife Debbie are first generation farmers, starting Jackson Farming Company in Sampson County in 1981. They currently grow watermelons, cantaloupes, honeydews, strawberries, pumpkins, corn, wheat, soybeans, peanuts, flue-cured tobacco, occasionally cotton, and various other crops.

Question #1: There are only five North Carolina legislators (about 2% of the General Assembly) who list farming as their occupation. As a farmer, what perspective do you bring to the General Assembly? Conversely, is there anything you’ve learned as a legislator that has given you new perspective on the farm?

There are a wide variety of backgrounds amongst my fellow legislators, and I believe that everyone’s individual and unique experiences are a source of value. As a farmer, I have tried to ensure that my colleagues know where their food comes from and the work that goes into putting food on the shelves. I have also made it a point to stress the goodness of American agriculture and the wonderful and exciting career opportunities that exist, especially for young people.

Question #2: In your opinion, what is the most significant state-level issue facing farmers in North Carolina? And what is one issue that may not be on the front-burner for farmers that you think they need to pay more attention to? Why?

I think there are several main issues that we will have to continue to work on at the state level. The first is labor, although mainly a federal issue and President Trump and Congress are working on a solution. However, it is important that from a state level, we are careful not to pass laws making it more difficult for farmers to use a legal workforce. Without a reliable and legal workforce, crops cannot be harvested.

We must also make sure that our regulatory framework is set up to foster growth in the industry and recognize that one-size-fits-all regulations rarely work in farming. Water rights will continue to be an issue that we must remain vigilant on. It will be important for farmers to make their voices heard as the EPA goes about reviewing and rewriting the Waters of the US (WOTUS) rule.

Farming is a way of life in rural North Carolina, and we must do a good job working with our urban citizens to ensure that rural and urban North Carolina works in harmony.

Another issue that we must tackle to ensure the future of farming is the average of the farmer, which in North Carolina is in the mid-50s. Too many of our children in rural communities are moving off the farm and to the cities. It is crucial that we make sure we inspire the next generation of farmers and expose our children to the career options that the ag industry offers. We must also make sure that we help first-generation farmers overcome the barriers to entry, especially given the price of equipment and land.

Question #3: Obviously, you’re very involved in agriculture policy at the legislature. What is another policy area you spend a lot of time working on?

Jimmy Dixon was elected to the North Carolina House of Representatives in 2010 and is currently serving his fourth term representing Duplin and Wayne counties. He chairs the House Agriculture Committee, is Vice-Chairman of Appropriations, and serves on numerous other committees as well. A few years after graduating from Wake Forest University in 1969, working for Procter & Gamble and teaching school, Rep. Dixon returned to his roots in 1973 and started a farming career raising poultry and vegetables for forty one years until his ‘semi-retirement’ in 2014.

His poultry operation grew over the years to raising about 700,000 heavy tom turkeys each year. His main crop production was string beans, cucumbers, and peppers.

He and his wife, Bobby Jean, have five children and six grandchildren.

Question #1: There are only five North Carolina legislators (about 2% of the General Assembly) who list farming as their occupation. As a farmer, what perspective do you bring to the General Assembly? Conversely, is there anything you’ve learned as a legislator that has given you new perspective on the farm?

As a farmer in the General Assembly, I understand that there are many good reasons that we have remained a free nation for these many decades. However, all those reasons combined may not equal the fact that we have been able to feed ourselves and produce an extra amount of safe economical food and fiber to help feed a hungry world.We must never lose the ability to feed ourselves!I have learned as a legislator that the great challenges facing farmers are, in part, twofold. First, government can change the rules in the middle of the game and increase regulations that strangle efforts to be productive. Secondly, special interest groups have leveraged influence within Corporate Board Rooms across the nation that facilitate retail boycott to promote undue regulations and change practices harmful to many safe and well established farming production methods.

Question #2: Has there been one agriculture-related policy provision that you have felt most passionate about, or that you feel would have the most positive impact on farmers?

I think two of the most important legislative actions taken since I have been in the General Assembly are the passage of H405 Property Protection Act passed in 2015 and H467 Agriculture and Forestry Nuisance Remedies passed in 2017.I have probably been more passionate about these two bills than any other bills we have passed because of their far reaching positive effect on our ability to unshackle farmers from misguided special interest groups who rely on the sensational and abnormal portrayal of some of our farming practices.

Question #3: What agriculture-related issues are you working on in preparation for the 2018 short session?

Last week, the North Carolina General Assembly passed the 2017 Farm Act, a bill that we’ve written about before and that NC Farm Bureau strongly supports.

The following commentary is by North Carolina Farm Bureau President Larry Wooten.

Immigration reform has been discussed, debated and argued for years, but eventually concludes with the same tired result – “next year is the year!”  To be blunt, fixing our worn-out immigration system does not require a rocket scientist. And this year needs to be the year.

What’s Going on with the Ag Workforce?

The short answer is, it’s changing. When I was still actively farming during the 1970s, 80s, and 90s, most of our farm workers were American citizens. But during the 90s that began to change, and farmers had to react to the change in their labor pool. What was happening over this time is American workers were taking other types of jobs for a number of reasons, but partly because people were becoming more educated and partly because of urbanization. Still needing workers, farmers began hiring more foreign-born workers because they were willing to do the job, and do it well.

Another trend farmers have been riding is mechanization. As farm workers have become more difficult to find, many farmers have looked to technology to help them get the job done. And for many farmers, technological advances have been a huge help in addressing workforce shortages.

The problem is that farmers aren’t magicians – eventually they reach a breaking point. And if we aren’t there yet, we’re getting close.