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"The cut in the capital gains tax rate is the biggest deal for farmers in this bill," Wolff said. "Lowering capital gains tax rates will affect them when they sell land, when they sell buildings and when they sell breeding livestock."

Wolff said the top capital gains rate will drop from 20 percent to 15 percent through 2008. The 10 percent rate will drop to 5 percent during the same time period. "This (rate cut) has been a priority for farmers for a long, long time," she added.

AFBF President Bob Stallman agreed on the importance of the capital gains rate cut. "Farming is a capital-intensive industry that requires huge investments in buildings, equipment and land to produce food and fiber. To remain efficient and profitable, farmers must adapt their businesses to produce the goods wanted by American and overseas consumers. Taxes imposed when buildings, breeding livestock and farmland are sold hamper the effort to adapt and upgrade operations."

According to Stallman, when farm assets are sold, agricultural producers pay capital gains taxes on the amount that asset has increased in value while they owned it. The taxes often threaten the transfer of farmland between producers.

"Nearly one-fourth of farmers and ranchers are above the age of 65. Because capital gains taxes increase the price of farm assets, the tax makes it harder for beginning or expanding farmers to purchase land and increases the likelihood that farmland will be sold for nonfarm use," he said.

Another part of the bill, dealing with tax deductions, also will benefit farmers, according to Wolff. "The bill includes an increase in the amount of money farmers will be able to deduct each year. It's called small business expensing and that limit, the maximum amount that a farmer can deduct, goes from $25,000 to $100,000."

Farm Bureau also is pleased with the treatment the bill gives to the alternative minimum tax. The exemption is increased to $58,000 for married couples and to $40,250 for single filers for tax years 2003 and 2004.

For weeks ahead of the bill being finalized, reports out of Washington focused on significant differences between what President Bush wanted and what Congress was willing to deliver in terms of the amount of tax cuts the bill would include. As for what happened to allow this deal to be completed, Wolff said, "The president had been pushing hard for that big tax cut, that $550 billion tax cut, but in the end he decided that it was better to have a smaller tax cut now than to drag out the fight for several more weeks or months."