Farm Bureau Asks Congress to Reform Tax Law
Farmers and ranchers need the economic benefits that will follow from tax reform says the American Farm Bureau Federation (AFBF) in testimony submitted to the House Ways and Means Committee on Thursday. Weather, high debt-service, a lack of liquidity and the difficulties of passing on land from one generation to the next all make taxation an important issue for farmers and ranchers.
AFBF asked legislators to ensure that tax reform results in lower effective tax rates for small and family-owned farms and ranches as well as for corporations. The group urged lawmakers to:
1.) Continue cash accounting, which matches farm income and expenses better than accrual accounting methods to help farmers pay their bills and manage their taxes;
2.) Preserve interest deductibility – an important matter at a time when the Agriculture Department estimates 17.9 percent of fixed farm and ranch expenses go to interest payments;
3.) Reduce capital gains taxes, which help families pass farms to the next generation;
4.) Continue like-kind exchanges to defer taxes when farmers and ranchers sell assets and purchase similar property to replace them. Without like-kind exchanges, some farmers and ranchers would need to borrow to continue their farm or ranch businesses or, worse yet, delay mandatory improvements to maintain the financial viability of their farm or ranch; and
5.) Eliminate the estate tax, which unduly penalizes farm owners who on average earn a small fraction of the income they might enjoy if they invested their dollars elsewhere.
Stabenow Hot Over Dismissal of EPA Review Board
Senator Debbie Stabenow (MI-D) Ranking Member of the U.S. Senate Agriculture Committee has written a letter to Environmental Protection Agency (EPA) Administrator Scott Pruitt to request information about the recent dismissal of nine members of the Board of Scientific Counselors (BOSC), a major scientific review board within the agency.
The BOSC reviews the research carried out by EPA scientists to ensure the integrity of the agency’s research findings, including studies on pesticide safety and water quality. The dismissal of scientists from the BOSC before their traditional tenure of two three-year terms has raised questions about the scientific underpinnings of the EPA’s decision making going forward.
Stabenow expressed concern over the dismissals in her letter to Pruitt, citing the importance of the BOSC’s role in safeguarding American agriculture. “Traditionally these counselors serve at least two terms, regardless of a change in Administrations,” wrote Stabenow. “The EPA’s vast research mandate – including research pertaining to pesticides and agriculture – requires that this board be comprised of experts from a broad range of specializations including engineers, economists, sociologists, toxicologists, chemists, climatologists, and hydrologists.”
USDA & USTR Teaming Up for Trade
U.S. Trade Representative (USTR) Robert Lighthizer officially notified Congress that President Trump intends to renegotiate the North American Free Trade Agreement (NAFTA). In a letter on Thursday, the top U.S. trade official said the goal was to improve the agreement and modernize it for farmers and ranchers.
“While NAFTA has been an overall positive for American agriculture, any trade deal can always be improved” said Agriculture Secretary Sonny Perdue. “As President Trump moves forward with renegotiating with Canada and Mexico, I am confident this will result in a better deal for our farmers, ranchers, foresters, and producers. When the rules are fair and the playing field is level, U.S. agriculture will succeed and lead the world. It’s why we recently announced the creation of an undersecretary for trade at USDA, because as world markets expand, we will be an unapologetic advocate for American agriculture. As I have often said, if our people continue to grow it, USDA will be there to sell it.”
Last week, Secretary Perdue announced the creation of an undersecretary for trade and foreign agricultural affairs in the USDA, a recognition of the ever-increasing importance of international trade to American agriculture. The new undersecretary will work hand in hand with Commerce and the USTR and help open up even more markets to American products.
Agricultural trade is critical for the U.S. farm sector and the American economy as a whole. U.S. agricultural and food exports account for 20 percent of the value of production, and every dollar of these exports creates another $1.27 in business activity. Additionally, every $1 billion in U.S. agricultural exports supports approximately 8,000 American jobs across the entire American economy. As the global marketplace becomes even more competitive every day, the United States must position itself in the best way possible to retain its standing as a world leader.
Purdue to Host Global Economic Event in June
For many people, the Great Recession of 2007-09 was an unwelcome revelation as to how interdependent global economies had become. The economic downturn in the United States triggered economic slowdowns in many countries. As The Economist noted in a 2009 article, “a downturn anywhere would become a downturn everywhere.”
Yet, that reality had long been recognized by leading economists and researchers. That’s why many of them find more significance in the upcoming 25th anniversary of the Global Trade Analysis Project (GTAP), a collaboration of more than 15,000 researchers in 170 countries that revolutionized the analysis of trade policies and their global impact.
More than 225 economists, including representatives from the World Trade Organization, various United Nations and government offices and other leading international institutions and universities will convene at Purdue University June 7-9 for the 20th Annual Conference on Global Economic Analysis, a gathering that started in 1998, six years after the founding of GTAP at Purdue University.
Whether economists around the world are studying the far-reaching impact of Brexit or new trade agreements, they universally consider the GTAP Model and GTAP Data Base as some of the most critical tools for sound economic analysis. Under GTAP, analysts from those 170 countries starting sharing resources and data to conduct more comprehensive quantitative analysis of international policy issues. That type of collaboration was unprecedented.
“GTAP has done nothing less than revolutionize the way we perform applied economic research,” said Dr. Frank van Tongeren, Head of Division, Policies in Trade and Agriculture, Organisation for Economic Co-operation and Development (OECD) in Paris, France. “Harnessing the power of network economies was not an obvious thing to do in the trade research community, or indeed in economic research more generally, when GTAP started 25 years ago.”
“There is hardly a trade minister in the world who has not heard of GTAP,” said Dominique van der Mensbrugghe, director of GTAP and research professor in agricultural economics at Purdue University. “No trade agreement is made without some quantitative assessment using a GTAP-based model.”