06/03/08 The new farm bill and tax incentives

Farm and Ranch June 3, 2008 When it comes to farm bill provisions nutrition, commodity and conservation programs may get most of the press, but the new law also contains tax provisions that will be beneficial to farmers and ranchers. Wolff: "This is the first time a farm bill has had tax code changes in it. So the fact that Congress tried to provide incentives for farmers and ranchers is significant." That is American Farm Bureau Federation tax specialist Pat Wolff. She says conservation practices and energy production are two of the biggest categories of new tax incentives. Wolff: "There is a new tax incentive designed to encourage the production of biofuels from cellulosic. That means the government is giving tax breaks to people who can figure out how to make fuel from things other than food. That would be switch grass, agricultural waste, wood chips, just about anything you can think of that you can't eat." Another provision offers a tax deduction when farmers and ranchers adopt new practices to help endangered species. There are also tax incentives for conservation easements on property and some changes in the way farmers will pay taxes on Conservation Reserve Program payments. Wolff: "All of this is brand new so it is going to take a little while for all the information to filter out, but farmers and ranchers should be watching their tax forms and tax publications for next year because all the changes will be explained there." I'm Bob Hoff and that's the Northwest Farm and Ranch Report on the Northwest Ag Information Network.