October 26, 2000

As Congress worked to wrap up the 106th session by week's end, the American Farm Bureau Federation published a list of tax-related priorities the organization supports. Earlier this week, AFBF said Congress still had time to "help farmers and ranchers with a $2.1 billion agriculture tax package that includes a number of Farm Bureau tax priorities."

According to Pat Wolff, an American Farm Bureau Federation senior director of governmental relations, while the agriculture tax provisions included in the Senate Community Renewal and New Markets Act of 2000 would not amount to a significant component of the larger tax picture, they would make a considerable difference to farmers and ranchers.

"Rural American residents and family farmers in particular are facing tough economic times," Wolff said. "Farmers and the rural communities they support have not prospered like the rest of the country. Enactment of the agricultural tax package will provide a long-term economic boost to farmers and other rural residents."

The agriculture tax provisions included in the legislation, which were inserted by Sens. Chuck Grassley (R-IA), Max Baucus (D-MT), Larry Craig (R-ID) and Kent Conrad (D-ND), would: allow producers to contribute up to 20% of their income into a five-year tax-deferred Farm, Fish and Ranch Risk Management (FFARM) account; amend the tax code to ensure that farm cash rents are not subject to an additional 15% employment tax; ensure that conservation reserve program (CRP) payments are treated as rental income and not subject to self-employment taxes; provide a tax deduction to farmers who donate food to hunger relief organizations; ensure farmers are not disqualified from using income averaging due to the alternative minimum tax (AMT) calculation and allow cooperative ethanol producers to receive the same benefits as large corporations.

Supporters of the bill hope to attach it to an end-of-the-year omnibus spending bill. But as House-Senate discussions wind down on the measure, negotiators could opt to remove some of the Farm Bureau-supported provisions.

"Almost all of these provisions were free-standing bills, many were passed by Congress," Wolff said. "We hope that legislators will continue the support they lent to the earlier tax bills designed to help producers." If Congress wraps up the session without considering the community renewal bill, Wolff said Farm Bureau's push for these tax provisions will continue past the election.