House Bill 202 provides tax incentives for farmers who sell to beginning farmers
By Diego Flammini
A new law in Missouri is designed to support the next generation of farmers in the state.
House Bill 202, which came into law on Aug. 28, provides tax incentives to farmers who work with young farmers.
The law “authorizes an income tax deduction for farm owners who sell, lease, or participate in a crop-share arrangement with a beginning farmer,” the bill says.
The tax deductions are as follows:
- Up to $500,000 per year for selling a farm to a beginning farmer, and
- Up to $25,000 per year from leases or crop-share agreements.
“It incentivizes existing farmers to sell their land to keep property, maybe in the family, but definitely in the country, which we need more of,” Congressman Mark Alford from Missouri’s 4th congressional district, told KSHB.
Young farmers are pleased with the bill.
Beginning a farm enterprise can be costly, and weather can make it challenging.
Having a program in place to support young farmers help them focus on farming, said Ethan Vanderwert, a 19-year-old farmer from New Franklin, Mo.
“You’re looking at a huge investment just to get the ball rolling, not only the learning curve getting into it,” he told KSHB. “And what if those first three years, we’re in a drought like we are this year?”
Federal programs are also available for young and beginning farmers.
These include direct farm ownership loans to provide access to land and capital.
For these programs, the United States Department of Agriculture defines a beginning farmer as someone who:
- Has not operated a farm or ranch for more than 10 years.
- Does not own a farm or ranch greater than 30 percent of the average size farm in the county as determined by the most current Census for Agriculture at the time the loan application is submitted
- Meets the loan eligibility requirements of the program to which he/she is applying - Farm Operating Loan, Farm Ownership Loan, or Microloan
- Substantially participates in the operation.