The president of the largest U.S. farm group called for members to bring the “same energy and devotion when it comes to WOTUS” that they used last year to preserve a tax break on inherited property. President Zippy Duvall said the American Farm Bureau Federation also influenced legislation and USDA programs on climate mitigation to ensure that they “respect farmers.”
In a speech opening the AFBF annual convention, Duvall asked members to “get engaged today” in the debate over the upstream reach of clean water laws. The AFBF says it has nearly 6 million members. The Biden administration announced last November that it would re-establish the “waters of the United States” definition, known as WOTUS, that was in place before 2015, a step that would repeal a narrow regulation written during the Trump era.
“Lawmakers heard us loud and clear [in 2021], and we succeeded in protecting stepped-up basis for the survival of our family farms,” said Duvall, referring to tax break for heirs. “We need that same energy and passion when it comes to WOTUS. It is critical that this administration understands that we should not need a team of lawyers and consultants just to farm our land.”
Most day-to-day farming activities are exempt from water pollution rules, but farmers perennially fear complex regulations. The AFBF was in the forefront of opposing the 2015 Obama-era water rules, which it said was overly broad. Environmentalists said the Trump rule left half of U.S. wetlands and millions of miles of streams without protection from pollution.
President Biden proposed stricter enforcement of capital gains taxes to help pay for his “build back better” package, but House Democrats decided last fall against altering the “stepped-up basis” tax break that helps farmers pass land from generation to generation. Farmland and other property is taxed at current value when it is inherited —the “step up” — rather than on the increase in value since it was acquired.
Stepped-up basis reduces the tax burden if property is sold soon after it is inherited. It also reduces the chance of estate tax liability. Only a comparative handful of farm households are required to file a federal estate-tax return, and most of them do not pay any money.
The White House said its plan would not increase capital gains taxes on heirs who wanted to keep the family farm running. The AFBF said the change in tax code would have far-reaching effects. It eventually opposed passage of the “build back better” bill.
Duvall also claimed that recommendations from the Food and Agriculture Climate Alliance (FACA), a food, forestry, farm and environmental coalition co-founded by the AFBF, “not only guided climate discussions in D.C., they are the foundation of legislation and USDA programs that respect farmers.”
Founded in 2020, FACA has advocated voluntary action and “market-driven opportunities,” such as contracts and tax credits for carbon sequestration. More recently, FACA said the USDA should experiment with pilot projects to identify fruitful avenues for climate mitigation before setting up a so-called carbon bank.
Proponents have varying ideas of what role a carbon bank would play in climate mitigation while key Republican senators say the USDA lacks the authority and the funding to bring one into existence. Agriculture’s role in climate mitigation may be a leading issue for the next farm policy law, due in 2023.
Agriculture is responsible for 10 percent of U.S. greenhouse gas emissions. Farm-sector opposition helped to stymie previous proposals in Congress to mitigate climate change.
To read the text of Duvall’s speech, click here.
A video of the speech is available here.