"To make it easier for new farmers to afford their first farm,” President Barack Obama promised tax incentives for beginning farmers. These have yet to materialize, and the steep cost of land -- more than $5,000 per acre in Iowa -- can bar young would-be farmers from entering the profession, said Ferd Hoefner, policy director for the National Sustainable Agriculture Coalition.
Although federal tax incentives are not yet at hand, White House and U.S. Agriculture Department media representatives point to other steps the administration has taken to create incentives promoting sustainable agriculture, some of which also make it easier for new farmers to acquire land.
A White House spokeswoman noted that Agriculture Secretary Tom Vilsack testified before the Senate agriculture committee in June 2010 that the 2012 Farm Bill should include a goal to add 100,000 new farmers. The Des Moines Register reported on the hearing.
On the sustainability front, in September 2010, the USDA began offering loans of up to $300,000 to farm owners and operators who need capital to implement conservation practices, according to a USDA press release.
Other USDA programs, including the Conservation Reserve Program, the Conservation Stewardship Program, the Environmental Quality Incentives Program and the Wetlands Reserve Program extend financial and technical aid to farmers, ranchers and landowners who implement conservation practices. The administration, in its FY 2011 budget proposal, requested about $5 billion for these programs. In FY 2012, the administration also proposed budget increases for those programs, including $145 million above the FY 2011 estimate for the Conservation Reserve Program.
Through CRP, landowners agree not to farm certain acreage for 10 to 15 years in exchange for annual payments from the federal government, said Jeff Ward, chairman of the National Council of State Agricultural Finance Programs. The contracts on more than 4 million acres will expire this year, and -- to help bring new farmers into the profession -- the Farm Services Agency has offered two additional payments to owners who rent that land to beginning farmers. Landowners already have committed to transition 54,000 acres to new farmers, according to a USDA spokesman.
President Obama included in his FY 2011 budget some increases in funding for the Sustainable Agriculture Research and Education Program, the Rural Microentrepreneur Assistance Program and the National Organic Program, among others. But in the president"s FY 2012 budget, proposed funding for these initiatives, which support beginning farmers, conservation practices, organic food regulations and research remained level or decreased.
The Rural Microentrepreneur Assistance Program receives $4 million each fiscal year per the 2008 Farm Bill, said Steph Larsen, of the non-profit Center for Rural Affairs, which oversees the program. However, the president"s FY 2012 budget includes just $3 million in mandatory funding for these loans and grants for rural small businesses plus $6 million in discretionary spending, down from the $8 million President Obama requested in FY 2011. As of October 2010 -- farmers may apply for the small business loans.
The $50,000 cap on the rural small business loans won"t buy farmers much land, Larsen said, but "beginning farmers these days tend to be smaller-scale, not commodity crops. They tend to be alternative, specialty crops like fruits and vegetables.”
There are state tax credits available to some new farmers. Iowa, Nebraska and Wisconsin provide a tax credits to landowners who rent to a beginning farmer, and Hoefner said the idea of a federal tax credit isn't "outside the realm of possibility” -- because of the political support it could garner from members of Congress from farming states -- if the 112th Congress were to take up a major piece of tax legislation.
Still, with no federal tax incentives for new farmers on the horizon, we"ll continue to rate this promise as Stalled.