The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.
“INCENTIVES FOR AGRICULTURE” mentioning the U.S. Dept of Agriculture was published in the Extensions of Remarks section on pages E1418-E1419 on July 31, 1996.
The publication is reproduced in full below:
INCENTIVES FOR AGRICULTURE
______
HON. WILLIAM M. THOMAS
of california
in the house of representatives
Wednesday, July 31, 1996
Mr. THOMAS. Mr. Speaker, 1 million acres of farmland in the United States will be eaten up by parking lots, freeways, and suburban growth this year. In fact, within the hour, one acre of precious farmland in the Central Valley of California will be taken out of production.
The Central Valley of California currently produces over $13 billion in agriculture produce and feeds millions in the United States and around the world. Farmland in areas surrounding cities is being displaced by urban development at one of the fastest rates in history and for this reason our farmers have been placed under new pressures. A time can be foreseen in which an area like the Central Valley may not even be capable of feeding itself because of urban outgrowth.
When the great cities of our country were settled, they were developed near rich agricultural land to assure an adequate food supply. As urban areas continued to sprawl, many fertile acres were consumed and many more were placed at risk. Over the past 10 years, urban sprawl has eaten up over 26 million acres of productive farmland: an area the size of Kentucky has been displaced by urban development. Most of the farmland lost in the country has been located in urban influenced counties--where the density is at least 25 persons per square mile. A recent study by the American Farmland Trust estimated that the farmland in the urban influenced counties was 2.7 times more productive than the remaining U.S. counties. Eighty seven percent of our domestic fruit and nut production is also grown in these threatened counties.
Every citizen should be concerned with a secure U.S. food supply and preservation of productive lands because the loss of farmland affects more than family farmers. Others affected by the land loss include the large agriculture support sector that ranges from fertilizer and equipment suppliers to fruit and vegetable processors. The general public could also face grocery counters half-full of not so fresh, costly produce imported from around the world. Agriculture is a basic and fundamental part of life from the food we eat to the clothes we wear. It is important that during times of fast growth we take a closer look at how our land is being used and how we can protect those that are being displaced by the urban community.
Farming has been placed under new pressures that are coupled with the rising costs of this capital intensive business. For example, farmers putting in a wine grap vineyard will encounter 4 years development costs over $17,000 dollars per acre above the land acquisition costs. Pistachio farmers should expect at least $7,000 dollars in preproductive costs per acre and olive growers $5,000 dollars an acre. These costs could literally double or triple dependent on the value of the land.
Aside from the high start up costs of crops such as orchards and vineyards U.S. farm real estate values also continue to rise. According to statistics compiled by the U.S. Department of Agriculture the value of U.S. farm real estate has risen 6.4 percent over the past year to
$832 per acre. This $832 figure may be rising, but it still does not nearly reflect the cost of acquiring a prime piece of farmland in highly productive, urban-influenced states like California and Florida. An average piece of farmland in California and Florida is worth over
$2,000 and can be worth as much as $17,000.
Along with high costs farmers continue to be plagued with storms, disease, and pests that destroy many acres of orchards and vineyards annually. Some of this costly acreage has not even reached a productive state. Crops like tangerines and cherries can take 5 to 6 years to reach productivity. In a natural disaster a farmer with a crop in a preproductive state may have trouble sustaining large losses because he does not have a return on his investment. Most farmers do not realize an actual profit for many years after a productive state is achieved. Natural disasters particularly impact small family farms that already have a small profit margin.
As a witness to the rate of urbanization in my own district, I have developed two incentives that would amend the 1986 tax code and keep families in farming and land in rural uses. I recently introduced H.R. 3749 to amend the tax code to promote replacement of crops destroyed by casualty. This bill will provide an incentive to replant by allowing them to deduct the cost of replanting their destroyed crop in the event of freezing temperatures, disease, drought, or pests, all events that cannot be controlled. It allows farmers to deduct the costs of replacing key infrastructure.
I have also introduced H.R. 520 to make it easier to tranfer farms from generation to generation. According to the U.S. Department of Agriculture the average size farm in the United States is 469 acres. The land alone of an average farm in California is worth over $1 million and can be worth as much as $8 million on prime farm land. These numbers are the primary reasons that I have introduced H.R. 520 to double the current maximum benefit under the estate tax special valuation deduction. A farmer can be worth millions in terms of acreage but that does not necessarily mean that there is cash to pay estate taxes, or--during his life--other unexpected costs. This results in many farmers splitting their land up into parcels and selling out to developers just in order to cover their costs.
Current tax law that allows for $750,000 in maximum benefits is outdated in accordance to the cost of farming today. After you figure in the value of crops, irrigation systems, improvements (buildings, etc.), and equipment, the value of today's farm may be worth almost twice as much. The bills proection of $1,500,000 would allow for more continuity in farm acreage when transferring land between generations, avoiding the need for families to split up their land to pay off the estate tax.
Prime agriculture land is being authorized as we speak. Providing these small incentives to America's farmer would encourage families to stay in farming and secure an abundant food supply for the 21st century.
____________________
