Delegates of the 2012 Illinois Farm Bureau (IFB) Annual Meeting introduced Monday two ‘sense of the delegate body’ resolutions, calling on Congress and President Obama to act on issues surrounding the fiscal cliff and Mississippi River water levels.
“The delegate body did vote on a couple of resolutions which aren’t policy themselves, but are, as it says, a sense of the delegate body,” said Mark Gebhards, executive director, Governmental Affairs and Commodities, Illinois Farm Bureau. “One of those resolutions had to do with the fiscal cliff, which is obviously a huge issue for us in agriculture — an issue that we hope Congress will take up soon, before the end of the year.”
In the resolution, delegates asked Congress to address issues including the estate tax and the Section 179 tax exemption, both of which could negatively impact farming if not resolved soon.
In the case of the estate tax, the value of farms and ranches is usually tied to assets such as farm land, buildings and equipment. The current personal exemption is $5 million, which means that if a farm or ranch is valued at $5 million or less, heirs to the operation are not required to pay inheritance tax. However, in 2013, the personal exemption is set to revert back to $1 million, which might force families to sell some or all of these assets to pay the estate tax.
Section 179 of the Internal Revenue Code allows taxpayers to expense, or deduct as a current expense rather than a capital expense, up to $125,000 of the total cost of a new or used qualified depreciable item they buy and place in service in the current year. Each year, farmers make large capital purchases in the form of equipment and are often able to utilize Section 179 in their operations.
“The condition of the Mississippi River was addressed in one of the sense of the delegate body resolutions as well, imploring the president to take action so that commerce on the Mississippi River is not adversely affected any more than it already has been,” Gebhards said. “It also asks the president to work with the Army Corps of Engineers to address the water flow or the level of water in the Mississippi.”
This summer’s drought left water levels in the Mississippi River lower than normal. Beginning in November, the Army Corps of Engineers reduced the flow of water from the upper Missouri River, which contributes as much as 60 percent of Mississippi River’s flow near St. Louis. With the reduction in flow, water levels became dangerously low, impeding the flow of barge traffic. If nothing is done to increase the flow of water into the Mississippi, the river could dip below 9 feet in as little as two weeks, causing river traffic to be shut down completely and leaving farmers and business without inputs that come up the river, including fertilizer, steel and energy sources like coal.
Page 2 of 2 - “I’m very pleased that the delegates supported the resolution — and did so unanimously,” said David Gay, president, Pike County Farm Bureau. “I think lending the Illinois Farm Bureau’s voice to the others which are calling for the president and the Corps of Engineers to move as quickly as possible to resolve this situation will help very much. We need to continue to shine light on this situation and make sure the public is aware of how crucial the Mississippi River navigation is to not just farmers, but to the entire economy.”
Delegates also discussed animal identification and traceability as well as the gambling bill currently being debated in the Illinois legislature. Finally, delegates discussed the lack of standardization in aflatoxin testing, which came to light during the 2012 drought.
The IFB is a member of the American Farm Bureau Federation, a national organization of farmers and ranchers. Founded in 1916, IFB is a non-profit, membership organization controlled by farmers who join through their County Farm Bureau. IFB has a total membership of 412,177 and a voting membership of 82,550. IFB represents two out of three Illinois farmers.