By Matt Reese
Legislators heard from Ohio agriculture yesterday in a hearing for House Bill 183. The bill was recently introduced by state representatives Susan Manchester (R-Waynesfield) and John Patterson (D-Jefferson) to create a tax credit program that would incentivize retiring farmers to sell or rent to beginning farmers in Ohio.
Nathan Brown, Highland County, and Rose Hartschuh, Crawford County, representing Ohio Farm Bureau, testified as proponents of the bill. Bennett and Liza Musselman, part owners/operators of Musselman Farms in Pickaway County, also testified on behalf of the bill.
“The agriculture industry is extremely difficult to break into if you or your family do not have a background in farming. High amounts of capital are needed to invest in land, equipment, labor, crops or livestock, financial management plans, and compliance with regulations just to get started. New farmland is not readily available, so there is restricted access to the ground required, adding yet another barrier to individuals who are looking to start a career in farming,” Brown said in his testimony on April 30. “The current farming population is aging and new farmers are not joining the industry or remaining in agriculture. By giving established farmers a tax credit for leasing or selling to a beginning farmer, this bill will help those looking to exit agriculture keep the land in production by passing it on to a beginning farmer.”
In the bill, established farmers and ag producers would receive a state income tax credit when they sell or rent agricultural assets including land, machinery, building facilities, or livestock to a beginning farmer. The credit would be equivalent to 5% of the sale price, 10% of the cash rent or 15% for a cash share deal. In addition, beginning farmers could also receive a tax credit of up to $1,500 for taking a qualified financial management course, but do not receive tax credits for buying land or other farm-related items. To qualify for the program, a beginning farmer would be defined as an Ohio resident who has been farming for less than 10 years with a net worth of less than $800,000 and cannot be a relative of the established farmer.
In addition to Ohio Farm Bureau, the Ohio Ecological Food and Farm Association is supporting the bill. The Ohio Poultry Association, the Ohio Pork Council, the Ohio Dairy Producers Association and the Ohio Cattlemen’s Association also sent in letters of support for yesterday’s hearing, with the following caveat.
“The important issue of family farm succession was raised by Representative Powell at the [April 9] hearing, mainly if HB 183 would apply in these succession situations. When our organizations brought HB 183 before our respective members in consideration of supporting this bill, an overwhelming majority of our members asked about this very issue, as many of them expressed a desire to create a positive economic climate for future younger farmers within their own families,” the organizations said in the letter. “Our associations appreciated Representative Manchester’s response that the main purpose of the bill was to address situations outside of this area for opportunities for others to enter the agriculture industry. We certainly applaud this goal and commend the two sponsors for stepping forward to take a proactive step in providing incentives to make a career in farming and agriculture possible for many young Ohioans. However, even if it outside of the context of the contents of HB 183, Ohio’s agricultural community hopes there will be continued discussion and consideration on the family farm succession issue.”