Arkansas farms and ranches get tax relief

The University of Arkansas Division of Agriculture System and the United States Department of Agriculture are partnering to provide taxpayer education for farmers and ranchers. The partnership aims to provide resources for educators and tax practitioners who also work with rural and agricultural clients.

The effort is part of a $14.5 million investment by the USDA Farm Service Agency through two outreach efforts – the first to new farmers and the other to underserved audiences.

The USDA announced the partnership earlier this month.

In the first phase, the FSA is investing $10 million in agriculture-focused taxpayer education, an effort called the Taxpayer Education and Asset Protection Initiative. The second phase includes a $4.5 million investment in outreach to the Conservation Reserve Program’s Transition Incentives Program, which facilitates access to land for beginning and socially disadvantaged farmers and ranchers.

Ron Rainey, Assistant Vice President of the Agriculture Division, will lead the program development effort through the National Farm Income Tax Extension Committee, the National Network of extension risk management and other land grant partners. Once developed, there will be a series of sessions to train educators “with the ultimate goal of reaching our farmers and ranchers in all 50 U.S. states and territories,” he said.

Many growers are unaware that the USDA program funds they receive for conservation contracts, disaster relief payments, and pandemic relief are taxable income, and need help with short-term and long-term business planning associated with their program payments, according to the USDA.

“Many rural areas lack certified legal and accounting services, and agricultural producers need additional knowledge and/or resources to incorporate tax planning into their financial planning,” Rainey said. “This partnership will help the Agriculture Division and USDA work together to overcome inequities in tax services serving farming communities.”

The next phase of this work will include a suite of online resources for producers, continuing education opportunities for tax attorneys and CPAs, and funding and training opportunities for stakeholder organizations.

“This is the kind of effort that goes to the heart of the land-grant mission to help our neighbors in the agriculture industry and our rural communities,” said Deacue Fields, who heads the Agriculture Division. “I appreciate the leadership role Ron Rainey has played in bringing this effort to life.”

This new initiative offers support for producers to navigate tax season, according to Gloria Montaño Greene, assistant undersecretary for agricultural production and conservation.

“Running a farm business is tough, and we’re working to fill in the gaps where farmers need help,” Greene said. “First, filing taxes for a farm business can be difficult and many agricultural producers may not have the funds to hire accountants or tax specialists to help them, especially for historically underserved new producers.

“Second, we want to make sure producers are aware of our many program options, and the Conservation Reserve Program Transition Incentive Program provides a unique opportunity for producers whose CRP lands are expiring to help bring new farmers into the fold,” Greene said.

To learn more about Agriculture Division research, visit the Arkansas Agricultural Experiment Station website: aaes.uada.edu. Follow the agency on Twitter @ArkAgResearch.

The University of Arkansas Division of Agriculture System is an Equal Opportunity/Access/Affirmative Action Institution. If entrants require reasonable accommodation to participate or require material in an alternate format, they should contact the station at (501) 671-2229 as soon as possible. Dial 711 for Arkansas Relay.

Mary Hightower is with the Division of Agriculture System at the University of Arkansas.

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