The continuing drought and looming estate tax changes have farmers and ranchers keeping a close eye on policies coming out of Washington, D.C.
Home for the August recess, South Dakota’s Congressional delegates talked at Dakotafest in Mitchell Aug. 17 about the challenges they face and the work they’re doing making changes at a federal level that will help producers on the farm.
They were in agreement that producers facing drought conditions should have earlier access to cutting hay and grazing Conservation Reserve Program land.
Producers need something more practical that doesn’t take an act of Congress for them to get assistance, Rep. Dusty Johnson said. Sen. John Thune said they have been working to get more flexibility in emergency situations for over a decade, so farmers can hay the land while still protecting vegetative cover for wildlife.
“It’s a balanced approach, but it’s so stinking hard to convince the bureaucracy to do things that seem so logical to us here in South Dakota,” Thune said.
The tool for disaster relief this year is WHIP-plus (the Wildfire and Hurricane Indemnity Program), which passed out of the Senate agriculture committee in early August. Thune said the issue now is distributing the funding, but it’s much needed.
“There isn’t an acre of ground in South Dakota that isn’t in some category of drought this year,” he said.
To help farmers and ranchers better prepare for future natural disasters, Johnson said he is taking as his marching orders the recommendations put out by a group of ag, food and forest organizations. The Food and Agriculture Climate Alliance gave its guidance last November. Some of those ideas will be put in place in the next farm bill, he said.
South Dakota’s delegation said farmers deserve more credit for what they already do in the way of conservation, from storing carbon to producing ethanol.
“Those are the types of things that win for everybody,” Sen. Mike Rounds said. “You capture the carbon, you put it to good use and you turn around and make a renewable resource even more valuable than it was before.”
The Growing Climate Solutions Act that passed the Senate in June is a start to establishing a carbon market. Thune said it’s legislation that makes some sense and it allows farmers an opportunity to benefit from the carbon trend.
“They way it should be done, however, makes a huge difference,” he said. “The wrong way to do it is the heavy-handed government, taxes and regulations and requirements. The right way to do it is a voluntary, incentive-based approach.”
Mandatory country of origin labeling has been Rounds’ fighting issue. The lebeling requirement for meat often gets held up at the World Trade Organization. Thune has a bill that would direct the U.S. trade representative to come up with language that the WTO would approve.
“I hope that we can get that done. It is just way too overdue,” he said.
“I think its time has come,” Rounds said, adding that country of origin labeling should be built into trade agreements up front.
South Dakota’s delegation has urged the administration to continue its investigation of the cattle markets. If packers have violated the Packers and Stockyards Act, it should be enforced, Thune said, and if not the act needs to be revised.
Tax law changes and how it will affect passing the farm to the next generation were a large part of the conversation at Dakotafest. A proposal that is part of the infrastructure bill passed by the Senate would do away with the stepped-up basis and make the capital gains tax paid at death.
Moderator Zippy Duvall, president of the American Farm Bureau Federation, called it an “impossible” proposal that would affect every small business in America.
“That is unprecedented in this country that you would tax someone on income they haven’t realized yet,” Thune said. “This is just a really, really bad idea that should end up in the ash heap of history.”
Johnson said his urban colleagues in Congress don’t understand how cash-flow poor agriculture can be, but some farm state Democrats are coming around.
“There’s going to be bigger consolidation. There’s going to foreign countries buying up our farmland,” Duvall said. “Because we are land rich and cash poor because it takes land to farm.”