A look at the Farm Bill, Ethanol and Estate Tax in the New Year
Wednesday, January 09, 2013 8:06 AM
Just before the capping off of 2012 leaders in Washington D.C. negotiated a nine-month Farm Bill extension as part of the Fiscal Cliff Deal.
For the last week agricultural organizations from across the country have been weighing in on the outcome. Most are happy the estate tax didn't see any significant changes. Those supporting renewable fuels were pleased with the tax credits allocated, but most say they are dismayed at the lack of spending cut backs in the Farm Bill.
Chuck Hassebrook, executive director of the Center for Rural Affairs says the measure attached to the fiscal cliff legislation slashed the wrong things - investment in the future of small rural communities and family farming and ranching.
A new five-year Farm Bill had been the hopes of several agricultural producers in the country. But debates over crop insurance and food stamps plagued any completion of a new deal from the start.
The Senate had passed its version early last summer and the House Agriculture Committee did recommend one - calling for reduced spending by $35 billion over 10 years - but it never was voted on by the full House. As part of the Fiscal Cliff Deal the old 2008 Farm Bill was extended until September.
"Without progress on the spending side, we are on a one-way road to fiscal disaster," said Bob Stallman, American Farm Bureau Federation president. "We are disappointed that Congress was unable or unwilling to roll a comprehensive five-year farm bill proposal into the fiscal cliff package and we will continue to insist on the kind of reforms that were included in the proposals approved by the Senate and the House Agriculture Committees during the 112th Congress."
According to Hassebrook, the eleventh hour deal impacts many smaller, targeted programs that invest in proven strategies to create rural jobs, revitalize rural communities and initiatives to foster a new generation of family farmers and ranchers were completely left out of the final farm bill extension. It also prevents farmers and ranchers from being able to improve soil and water conservation through enrollment in the Conservation Stewardship Program in 2013.
More Deal Details
There were other ag-related areas in the Fiscal Cliff Deal as well.
Renewable Fuels Association (RFA) president and CEO Bob Dinneen is happy to report that three key ethanol related tax credits were part of the last-minute 2012 deal.
"I think it shows government support of new renewable fuels. Up until the vote, the support was being shown more towards petroleum and fracking," says Dinneen.
The extension is for one year and Dinneen says it should ensure 2013 is a good year for advancing the ethanol industry.
"The one year extension of the cellulosic producer tax credit and accelerated depreciation provides some measure of certainty to ensure that 2013 will be a year of growth and milestones for the advanced ethanol industry. In addition, and equally significant, is the extension of the alternative fuel infrastructure tax credit which will accelerate E15's entry into the marketplace this coming year," he says.
Also in the Fiscal Cliff deal was the much-debated estate tax, or death tax as referred to by conservatives. Without legislative action the estate tax would have been set to 55 percent for inheritances valued at more than $1 million. Since the deal went through, the tax provision is 40 percent (up from 35 percent) for inheritances valued at more than $5 million.