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on occasion, for the Legislature to take a look at our statutes and clean up some of the confusing, unhelpful, and out-of-date provisions.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?

The following commentary is by North Carolina Farm Bureau President Larry Wooten, first published in the Spring 2018 issue of NC Field and Family.

Farm Bureau takes a stand on important issues

For more than 80 years, our Farm Bureau brand has served as a trusted voice on issues impacting the agriculture community. We must remain vigilant concerning the issues and challenges ahead of us in 2018.

Legislatively, we have a strong working relationship with the North Carolina General Assembly and the Governor’s office. We might not always agree on every issue, but I can tell you, they always want to hear from us. The same is true for our U.S. congressional members. We have great relationships with all 13 congressional offices and our 2 senatorial offices. This is a testimony to the strength of this organization and our grassroots leadership.

As the largest and most influential voice for rural North Carolina, we must not be afraid to take big, bold, and active stands on the controversial issues impacting our members. We must be prepared to stand alone if necessary. Our membership and the agriculture community expect Farm Bureau to do what is in the best interests of our farmers, regardless of the consequences.

In a few days, North Carolina Farm Bureau members and voting delegates will travel to Greensboro, NC for the organization’s 82nd Annual Convention. The event is a celebration of the year’s work: growing the membership, advocating for farmers and rural families, telling the story of North Carolina agriculture, and investing in the future of our state. But the convention is also the culmination of the year’s policy development process — a process that, for more than 80 years, has exemplified the true grassroots spirit of Farm Bureau.

We’ve discussed Policy Review Day in the past, and have talked about how that event kicks off the policy development process.

During the fall, those policy resolutions go back to all 100 counties and are reviewed, debated, and in some cases modified. This involves countless hours of input from thousands of farmers across the state. All of those county recommendations came together earlier this week and were reviewed again by a 100-person committee comprised of farmers.

At Annual Convention, those resolutions will again be discussed by a voting delegate body of more than 600 farmer members. The process is thorough, comprehensive, and is a wonderful example of how North Carolina Farm Bureau has remained true to its grassroots foundations.

As always, we look forward to next week’s Annual Convention, and we are proud of what it means for this organization and North Carolina agriculture.

READ: Eighty Years of Service for North Carolina Farm Bureau

Agriculture is the foundation of North Carolina’s rural economies, and plays a key role in strengthening and supporting our state’s rural communities. But another vital component of rural economic development is rural entrepreneurship – the innovators and creators who build upon the entrepreneurial spirit of agriculture by adding value, developing solutions, and investing in the communities they love.

North Carolina’s growing population is a fertile market for farm direct agricultural consumption. Farmers engaging in on-farm entrepreneurship benefit the state and their neighbors through stewardship of natural resources, creating local economic value, fostering a sense of community and preserving North Carolina’s cultural heritage. Among the types of businesses North Carolina’s rural and farm community develop are experiential businesses such as agritourism, product-based businesses such as farm made foods, value-added products, and crafts and service businesses targeted to the public or other farmers.

North Carolina Farm Bureau is proud to recognize our state’s agriculture and food innovation. This year, for the first time, North Carolina Farm Bureau members will select the North Carolina Farm Bureau Rural Entrepreneur of the Year. From a strong field of 44 applicants, three finalists have been selected based on their impact in rural North Carolina, their impact to the agricultural community, and for the innovation and creativity of their business ideas. The finalists will attend NCFB’s Annual Convention and pitch their businesses to NCFB volunteer leaders, who will vote to decide this year’s winner. The three finalists are:

Devine Farms is an important member of the Catawba County agriculture community. When judges reviewed their application they were impressed with how the Devines have worked with their community to partner with local schools, businesses and non-profits. Judges were particularly impressed with Devine Farms’ purpose to educate individuals about “agriculture, history and how food is produced.” The judges noted, “Their focus on agritourism is a model for other farms attempting to do similar projects.”

Fonta Flora Brewery is a fixture in the revival of downtown Morganton. The judges reviewing their application were impressed with their positive impact on jobs in the community. They were also impressed with their dedication to sourcing local ingredients from local farms. Judges also noted that the purchase of a local farm will enable the brewery to produce some of their own ingredients and will further increase the economic impact of the brewery through additional jobs.

Four Prongs Tea and Herb located in Watauga County is a value added medicinal herb business. Ginseng is a heritage herb product from Western North Carolina. While the market for ginseng roots is well established, the tops have been considered a waste product—no one uses them, that is until now by Four Prongs Tea and Herb. Judges reviewing their application were impressed by the knowledge base of company founders and the potential to add sales of tea made from ginseng leaves to an already established market for ginseng roots. Judges noted that “Their idea capitalizes on a sustainable niche.”

North Carolina Farm Bureau is proud of all this year’s applicants and we wish the best of luck to Devine Farms, Fonta Flora Brewery, and Four Prongs Tea and Herb as they compete for this year’s award. We’re excited to see what you’ll think of next!

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?

When Mike Smith enters a livestock barn in North Carolina, whether a county fair or the NC State Fair, you would think he was a local celebrity. Truth be told, to many of those who participate in NC livestock events, Mike IS a local celebrity. There’s no shortage of families that offer seating, snacks, and most importantly, hugs to a kindhearted man that has become extended family to those in the barn.

On Sunday, October 15, 2017, Mike’s celebrity status reached an all-time high, with his induction into the NC State Fair Livestock Hall of Fame. While most of the Hall of Fame inductees are lifetime breeders or financial sponsors, Mike, along with Mrs. Carol Turner, were selected for their roles in establishing a NC State Fair Competition that, for many years, was unique to our state – the NC State Fair Special Awards Livestock Show.

Mike is unlike any Hall of Fame Inductee before him; he was born with Down syndrome, a genetic disorder classified as a disability in the United States. But what some see as a disability, Mike never saw as a hurdle, and neither do those who love him. He has an amazing mind for numbers, loves children, and has always enjoyed being around livestock and fairs

In the late 1980s, Mike began traveling with his nieces as they competed in livestock events. While at those events, Mike’s job was to pick up manure from behind the cattle! When you heard Mike yell “PHONE CALL,” you knew it was code for ‘an animal left behind a pile of manure to be picked up.’ And you didn’t dare try to do it yourself – it was Mike’s job, and he was good at it!

In the mid-90s, Mike began to ask why he wasn’t able to show when he traveled with, assisted, and watched his nieces enter the ring time after time. So, several county fairs would allow Mike to walk an animal through the ring before the shows started. But the NC State Fair was different – it was big, it was busy, and it didn’t have time to let one person walk through the ring.