Estate Tax Contributes to Decline of Family Farms and Ranches
WASHINGTON - U.S. Agriculture Secretary Tom Vilsack expressed his commitment to expand opportunities for U.S. livestock producers at a workshop in Fort Collins, Colo., Aug. 27, 2010. He said the shrinking number of livestock producers is a source of concern. At the same time, he expressed the need to make it easier for the “next generation” of farmers and ranchers to come back to their family’s operation. Vilsack and U.S. Attorney General Eric Holder spoke to more than 1,700 livestock producers at the forum to discuss how to address the decline of livestock producers during the past 30 years.
"We have lost hundreds of thousands of (cattle) producers. We see the same thing in hogs, we see the same thing in dairy," Vilsack said.
While Vilsack focused heavily on industry concentration as a primary reason for the decline in livestock producers and a decrease of younger producers, many farmers and ranchers in the audience pointed to an increase in regulation and government-induced financial burden. Specifically, the estate tax was a frequent example used at the workshop.
"If Congress does nothing, they're in essence handing down a death sentence to family-owned farming and ranching operations," said NCBA President Steve Foglesong. "Taxing family farmers and ranchers out of business will have serious impacts on all Americans, not just in our rural communities."
Only 16 legislative days are left on the Congressional calendar until the estate tax reverts back to its staggering pre-2001 levels. If Congress fails to act, starting Jan. 1, 2011, farm estates worth $1 million will be taxed at a rate of 55 percent. The estate tax, commonly known as the "death tax," disproportionately hits agriculture. Ninety-seven percent of American farms and ranches are owned and operated by families, and the tax is considered one of the leading causes of the breakup of multigenerational family farms and ranches, which keeps young people out of production agriculture.
Bill Rishel, Nebraska rancher and president of the Nebraska Cattlemen's Association, said the burden of the estate tax is a deterrent to young people choosing production agriculture as a profession.
"If we want to keep the next generation on family farms and ranches to provide food for the growing population, the government needs to stop regulating them out of business," said Rishel. "This death tax is a regulation as far as I see it. This is truly ruining family farms. It is disheartening to watch family ranches developed into subdivisions because the death tax left ranch owners with no alternative."
Rishel said NCBA and state cattle producer associations are working diligently to inform Congress of the devastating impact this tax has on rural America. However, Rishel said it takes cattle producers contacting their elected leaders on their own to stop the ruin of family farms created by this tax. He said it will take “tremendous momentum” by the grassroots farmer and rancher.