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Change to APHIS inspectors
A new plan could hurt agricultural security at the nation’s borders. The border inspectors for the Animal Plant Health Inspection Service (APHIS) are now under the authority of the Department of Homeland Security. American Farm Bureau Farm Policy Specialist Mary Kay Thatcher said a recent news release from the department caught many in agriculture by surprise.

"They intend to make some big changes in the way those inspectors operate in the future, and those changes cause concern to U.S. agriculture," Thatcher said. "The initiative is called one face at the border. Instead of having different inspectors for APHIS, customs and immigration checks, one person will now do it all."

Now there will be one person who will be looking for terrorists trying to come in, people trying to smuggle drugs and all the typical things APHIS did, which is make sure that harmful products don't cross the border, watch for pests on different fruits and vegetables, Mad Cow, etc.

"APHIS inspectors typically had biology degrees and seven weeks of intensive agricultural inspection training. That won't be the case under the new plan," Thatcher said. "They're looking at 70 days of training, but only 16 hours of that would be on agricultural issues. In 16 hours people can't even begin to understand the problems and the pests and the other kinds of issues that they should be looking for.

"They're readily admitting they don't know everything about agriculture, and they're willing to learn. So we're trying to explain to them just how important this is."

Thatcher said unintentional introduction of pests and diseases is just as important as intentional introduction, therefore AFBF is working diligently to make sure that DHS has a good understanding of agriculture and industry concerns at the border.

CARE bill
The Charitable Giving Act of 2003 gives tax incentives to businesses that perform benevolent works. Of interest to farmers, the bill includes an enhanced tax deduction for charitable donations of food. Under current law, only C corporations can take a deduction. The bill would expand the deduction so that all farmers, regardless of how their farm business is organized, could take the deduction. Also within the bill is an expansion of the list of conservation program payments that can be excluded from taxable income.

Tax incentive for young farmers and ranchers
The American Farm Bureau Federation applauded the introduction of the Beginning Farmers and Ranchers Tax Incentive Act of 2003 in both the Senate and House. Sens. Chuck Hagel, R-Neb., and Byron Dorgan, D-N.D., introduced the legislation as S. 1464 in the Senate; Reps. Lee Terry, R-Neb., and Earl Pomeroy, D-At Large-N.D., introduced it as H.R. 2978 in the House.

The new legislation would eliminate capital gains taxes when agricultural land is sold to a beginning farmer or rancher. For transfers of farmland to other agricultural producers, a 50 percent capital gains tax reduction is provided. Under both circumstances the land must be kept in farming for at least five years or the forgiven tax must be repaid.

"Huge investments in buildings, equipment and land are required to produce food and fiber -- it's a capital-intensive industry," said American Farm Bureau Federation President Bob Stallman. "When producers sell a farm asset they are required to pay capital gains tax on the amount that asset increased in value while they owned it. This causes great hardship for farmers and ranchers, who own their land an average of 30 years before selling it. During that time they typically see their land increase in value five to six times, which results in a hefty capital gains tax under current law."

Capital gains taxes make it difficult to transfer farmland between agricultural producers. Nearly one-fourth of farmers and ranchers are above the age of 65. As they sell their land and buildings, the selling price is set to recover the cost of capital gains taxes. This can increase the price of farm assets needed by beginning or expanding farmers and ranchers, according to Stallman.

In a letter, AFBF commended the bill sponsors for recognizing the burden that capital gains taxes places on the nation's farmers and ranchers, and pledged support as they move forward with efforts to enact the legislation into law.