Majority of Producers Concerned About Tax Policy Changes

WEST LAFAYETTE, IN – Possible changes in U.S. tax policy are on the minds of ag producers, according to Dr. Jim Mintert the Director of the Center for Commercial Agriculture at Purdue University.

Ninety-five percent of respondents to the recent Purdue/CME Group Ag Economy Barometer said they are either somewhat or very concerned that changes in tax policy will make it more difficult to pass their farms on to the next generation with 87 percent expecting capital gains rates to rise over the next five years.

Three-fourths said they are “very concerned” about the possible elimination of the step-up in cost basis for farmland in inherited estates and just over two-thirds (68%) of respondents said they are “very concerned” about a possible reduction in the estate tax exemption for inherited estates.

Farmers expect the rise in farmland values to continue unabated over the next year as the Short-Run Farmland Value Expectations Index rose to a record high reading of 159 (up 11 points). Producers were less optimistic, however, when asked about the 5-year outlook for farmland values as the Long-Term Farmland Values Expectations Index declined 9 points in April (148 points).

“The difference in producers’ short versus long-term expectations” Mintert explains, “could be an indication they are concerned that the rapid rise in farmland values we’re seeing may not be sustainable over the long run.”
(SOURCE: All Ag News)