By Blake Jackson
Senator Mitch McConnell has introduced the Protecting American Farmlands Act, a bill aimed at preserving agricultural land by providing capital gains tax relief to farmers.
This legislation intends to facilitate the transfer of farmland to the next generation of producers, addressing the growing challenge of farmland retention.
The bill offers retiring farmers the ability to roll over gains from land sales to active farmers into individual retirement accounts, thus deferring taxes.
This measure allows retiring farmers greater financial control while ensuring farmland remains in agricultural production.
"Kentucky Farm Bureau is proud to once again stand alongside Senator McConnell in championing legislation that strengthens the future of American agriculture," stated Kentucky Farm Bureau President Eddie Melton. "The Protecting American Farmlands Act is the outgrowth of important work done through our Kentucky Farm Bureau Farmland Transition Initiative.”
Kentucky, like many states, has experienced a significant decline in farmland. Since 2002, the state has lost 1.4 million acres of farmland, a 10% decrease.
The number of farms has also dropped by 20%, and the average age of Kentucky farmers has risen to 57.1 years.
Rising land values make it difficult for new farmers to acquire land, while outside investors purchase farmland for non-agricultural development or lease it back to operators, limiting farmers' ability to build equity.
The Protecting American Farmlands Act builds on the Kentucky Farm Bureau Farmland Transition Initiative, which aims to keep farmland in production and ease financial burdens for retiring farmers.
By reducing tax liabilities, the bill provides a more flexible retirement strategy, addressing the issue of farmers being "asset rich and cash poor" in their later years.
"This legislation not only helps ensure that our nation’s farmland remains in the hands of active farmers, but it also provides retiring farmers with a viable pathway to transition their operations to the next generation. We look forward to the lasting impact this legislation will have on farming communities here in Kentucky and across the country," President Melton added.
Kentucky Farm Bureau, a long-time advocate for farm families, views this legislation as a crucial step towards ensuring the long-term sustainability of American agriculture.
Photo Credit: kentucky-farm-bureau
Categories: Kentucky, Business, Government & Policy