WASHINGTON -- Legislation is moving through the House that could help first-time farmers get started and keep farming legacies alive.
U.S. Rep. Jack Kingston, R-Savannah, signed on Wednesday to cosponsor the "Beginning Farmers and Ranchers Tax Incentive Act" (H.R. 2978). The bill was drafted with family farms in mind so that children who grew up on the farm might stay on the farm or have incentive to come back, Kingston spokesmen said.
"We need to encourage more young people to get into farming but we have to give them some incentives," Kingston said. "Today the average American farmer is 57 years old and with so many young people leaving the family farm to look for jobs, this bill will encourage more young people to enter agriculture by giving them an opportunity to come back home to rural America. This bill would provide new opportunities and a needed boost to America's agriculture industry."
To combat the loss of 100 million acres of farmland, H.R. 2978 provides not only tax relief but an incentive to keep the land in agriculture. The bill would create three levels of relief for farmers and ranchers who choose to sell their land.
Producers who sell their agricultural land to a beginning farmer or rancher would receive a 100-percent reduction in their capital gains taxes. This full exemption would help level the playing field for younger producers, who must often compete against larger, established farms or livestock producers as well as developers, who can offer higher prices for land, Kingston said.
Producers selling their land that will be kept in agricultural production would receive a 50-percent reduction in their capital gains taxes. This provision would help ensure adequate agricultural resources at a time when landowners are pressured to sell their land for purposes other than agriculture.
All agriculture producers selling their farm or ranch land would receive an automatic 25-percent reduction in their capital gains taxes regardless to whom they sell their land or for what purpose. This would provide some fairness for farmers and ranchers, since current law allows capital gains tax exclusions for the sale of a house but does not address the needs of agricultural producers who have most of their equity in land.
The bill has the support of many national agriculture organizations including the National Farm Bureau Federation, the National Farmers Union, National Cattlemen's Beef Association and the Center for Rural Affairs.