From the executive director: tax proposals put rural priorities at risk

As the hotly debated tax bills appear headed toward final votes in the House and Senate this week, the Center for Rural Affairs calls on members of Congress to send the bills back to committee for further debate. The Center opposed both the House and Senate versions of the bill.

In our review of the bills, a few of the provisions that will negatively impact rural people include:

Renewable energy credits targeted

The House bill directly cuts tax credits that help drive wind and solar energy development. The Senate bill makes a change to corporate income taxes that effectively does the same. Wind and solar energy are especially important economic drivers in rural America, and are critical to a clean energy transition. It is short sighted to end tax credits that support this emerging industry.

Tax cut for the wealthiest estates

Under current law, a married couple can pass on $11 million of assets in their estate without paying any estate tax. The Senate bill doubles the exemption to $11 million per person and $22 million per couple. Even under current law, only 0.2 percent of estates pay the estate tax. Just 28 estates in our home state of Nebraska were subject to any estate tax in the last year. Congressional leaders tout the estate tax roll back as a boon for small businesses and family farmers. In fact, it is a cut for the wealthiest individuals.  

Tax bill triggers automatic cuts

Under budget sequestration rules, if the proposed tax bills go into effect and Congress takes no other action, countless federal programs could see budget cuts as soon as 2018. For example, $3.86 billion would be cut from farm bill programs including cuts to conservation, beginning farmer, and small town infrastructure programs.

Health care programs targeted

The Senate bill could trigger $25 billion in cuts to Medicare. Furthermore, by ending the individual mandate for health insurance, it is expected that 13 million low-income Americans will drop health coverage, leading to major reductions in tax credits designed to help working adults afford health insurance.

Cuts to corporate income tax permanent; cuts for individuals temporary

The Senate bill would cut corporate income taxes from 35 percent to 20 percent. Proposed cuts for real people are weighted in favor of high income households. Furthermore, cuts for real people would expire after 2025 while corporate tax cuts remain in place, permanently.

These are just a few of the provisions in the two bills that would affect rural people and small towns.

Given our concerns, we urge Congress to return the bills to the respective tax writing committees. The current bill was hastily written and benefits the very richest individuals and corporations too much, while doing too little for everyday people and small town development.

There are innovative changes to our tax code worth considering. The Center supports proposals that use the tax code to promote investment in employer-owned small businesses, beginning farmers, and small town infrastructure. Returning the bills to committee will allow for a more robust public debate and consideration of these ideas.

We will continue to monitor and report on changes to these bills, as well as project the impact of any legislation that does pass. Read more about From the executive director: tax proposals put rural priorities at risk

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Women’s Learning Circle Spotlight: Erin Schoenberg’s philosophy is that nutrition starts in the soil

This is the first of two case studies we completed on our Women's Learning Circles. Check out the one page case study here.

Erin Schoenberg, and business partner, Margaret Milligan, used their knowledge of growing produce, vegetables, and herbs to launch their business, The Darlin’ Reds.

Located northwest of Lincoln, Nebraska, the small, diverse vegetable farm provides healthy, fresh, and clean produce to a Community Supported Agriculture (CSA), local restaurants, and grocery stores.

The women started the venture while working full-time off the farm, and found land to rent through existing contacts. Their landlords wanted to help beginning farmers and entrepreneurs, which was a perfect fit.

“We wanted to grow in the same way we wanted to consume,” Schoenberg said. “Our goal was to use our personal experience growing vegetables to help us farm specialty crops.”

The duo spent extra time and care to make sure only sustainable farming practices were used. Conservation was a priority.

“In a world of mass-produced, globally-sourced materials, we strived to show our community just how good local food can be,” Schoenberg said. “Growing good food is a passion and addiction for us.”

Farming methods included careful planning, crop rotation, and cover crops. Soil amendments, such as using manure to improve soil quality and overall plant health, were also utilized. The farmers do not use synthetic fertilizers, chemicals, or genetically engineered seeds.

When The Darlin’ Reds began, Schoenberg’s full-time job was with the Center for Rural Affairs, which gave her much-needed support. She and Milligan also received a microloan from the Farm Service Agency, which helped pay for a hoop house, tractor, and tiller. The owners networked with other women at the Nebraska Sustainable Agriculture Society’s young farmer nights.

For four years, The Darlin’ Reds sold produce wholesale to restaurants and farmers markets, and hired an employee for two seasons. Volunteers were paid in produce.

In late 2016, the two women decided to discontinue the business. Though Schoenberg says she and Milligan were great business partners, and the business was financially successful, they were not ready to commit to farming for the next 20 years of their non-professional lives.

“We couldn’t find balance,” she said. “We were definitely overdoing it. It was hard to maintain sanity and be productive, and hard to stay focused on our other jobs.”

The business owners share their experiences with others – what worked and what didn’t work. Schoenberg took part in the Center’s Women’s Learning Circles; peer group sessions that consider participants as the experts on their own production, farmland, and conservation needs. Information, experience, and resources are shared at each circle, allowing women to implement what they’ve learned into their own farm business or operation.

Eventually, Schoenberg became a Farmer Leader at the learning circles, where she educated other women about agriculture by sharing her own experiences.

“It's boundlessly good for the brain to be exposed to something outside the norm and for us to have conversations with people whose challenges may mirror or completely differ from our own,” she said. “Bonus points for getting to catch up with my neighbors.”

Though The Darlin’ Reds venture didn’t last, Schoenberg remains active in local agriculture, and as a leader in the Center’s Women’s Learning Circles.

“We couldn’t make a living [on a vegetable farm] by year three, like we had hoped,” Schoenberg said. “Be realistic and focus on your business. It’s really important people understand farming is all-consuming. Have a good understanding of what it will take; know you are committed and dedicated; be serious about it, or don’t bother.”

Feature photo: Erin Schoenberg, second from left, talks turkey production with Latino farmers while leading a farm tour. Read more about Women’s Learning Circle Spotlight: Erin Schoenberg’s philosophy is that nutrition starts in the soil

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Local FARMS Act feeds rural economies

Where our food comes from matters – for our health, for the vitality of our communities, for our wallets, and for the environment. One of the Center for Rural Affairs’ goals is to connect the local people who grow and make food with the local people who eat it.

We work to bring together farmers and consumers through community food systems and farm to school projects, providing workshops, webinars, and technical support. We have long supported local foods as an economic development tool in rural communities, working with community leaders to build healthy, sustainable, local food systems.

Recently, the Local Food and Regional Market Supply Act (The Local FARMS Act) was introduced in both the Senate (S. 1947) and the House (H.R. 3941). Through an investment in programs and policies that spur economic development, the act prioritizes the development of new markets for farmers and expanded healthy food access for American families.

Findings from the Agricultural Census in 2007 and 2012 show that farmers who market food directly to consumers have a greater chance of remaining in business than similarly sized farms that market through traditional channels.

In 2015, more than 167,000 U.S. farms produced and sold food locally through food hubs and other intermediaries, direct farmer-to-consumer marketing, or direct farm to retail. Those sales resulted in $8.7 billion in revenue for local producers.

We stand with Congressional sponsors in calling for this critical investment in our food and farm future. The Local FARMS Act should be included in the 2018 farm bill. Read more about Local FARMS Act feeds rural economies

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Iowa cover crop incentive: "A step in the right direction"

By Mary Kuhlman, Public News Service - Iowa

Planting cover crops now could save Iowa farmers money in the future. 

The Iowa Department of Agriculture and Land Stewardship recently kicked off a three-year project aimed at increasing acres of cover crops and improving water quality in the state. 

Aaron Lehman, president of the Iowa Farmers Union Aaron Lehman, says the program offers a $5-per-acre premium reduction on 2018 crop insurance for farmers who have fall-planted cover crops with a spring-planted cash crop.

"It doesn't pay for the entire cost of a farmer using cover crops but it's a step in the right direction and it's first of its kind,” Lehman states. 

“There is no other incentive like this in the entire country, so we're really happy that the state of Iowa is breaking ground on this new incentive."

Lehman notes that the incentive provides good support for those just starting cover crops, and adds that over time farmers find ways to save money and increase yields. 

The USDA Risk Management Agency is offering the funding as an additional insurance premium discount through the regular crop insurance process. Applications will be accepted through Jan. 15.

The project is part of the Iowa Water Quality Initiative, which aims to reduce nitrogen and phosphorus runoff by 45 percent. 

Lehman says it's a win-win for farmers, since crop insurance provides income stability and cover crops improve land resiliency.

"Cover crops retain the nutrients in the soil during the late fall, early spring period, and that's extremely important to improve Iowa's waterways,” he states. “In addition to that, it helps the farmers' fields by improving soil health, eliminating soil erosion, helping deal with compaction issues."

Lehman says cover-crop seeding dates have been extended, and as harvest comes to a close, farmers are encouraged to continue seeding winter-hardy cover crops to provide protection from the elements this spring.

Feature photo: Cover crops on a field in Black Hawk County, Iowa. | Photo by Lynn Betts, USDA Natural Resources Conservation Service Read more about Iowa cover crop incentive: "A step in the right direction"

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Staff member featured in 2018 Farmer’s Almanac

Center for Rural Affairs project organizer, Kirstin Bailey, is featured in The 2018 Old Farmer’s Almanac. Bailey was contacted to take part in their “Special Report: Faces of Farming,” a compilation of input from farmers and growers throughout America.

The answers Bailey and her fellow farmers provided spoke to both changes underfoot and timeless traditions.

How or why did you become a farmer?
My mom has always had a large garden. We thought that together, we could make it into a CSA farm.

What is the hardest part of your job?
Relying on nature. There is so much at stake.

What is the best part of your job?
Connecting directly with our customers.

What is your favorite farming or gardening tradition?
We always plant our potatoes on Good Friday.

What advice would you give to someone who wants to be a farmer today?
Have a strong plan and a realistic budget. Be flexible.

What, in your opinion, is the future of farming?
Women-led, small-scale, sustainable farms.

Bailey is a member of the family-run farming operation, Fox Run Farms, in Brainard, Nebraska. The farm has been in the family for 118 years, and in 2010, they started a community-service agriculture program, or CSA.

“We wanted to ensure we had a crop that would sell, we wanted to connect with our community, and we wanted to promote naturally grown food,” Bailey said. “We met all of those goals and are now expanding.”

The farm also has a vineyard that is in its seventh year of production. Half of the vineyard is Brianna, a white grape, and the other half is Marquette, a red grape. They are slowly transitioning the vineyard to an orchard, and starting to look at producing value-added products they can produce.

The Bailey family welcomes visitors and encourage CSA members to visit to see who grows their food and where it comes from.

Pictured: Kirstin is picking up nets off of vines with her son and father. Read more about Staff member featured in 2018 Farmer’s Almanac

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Local efforts to address water quality add up

This blogpost is the third in our series looking at water quality in Iowa. Read our first two entries here and here.

To address water quality, Iowa needs more funding for on-the-ground practices and conservation. Most of the current funding comes from the federal government. At the state level, the public is putting more pressure to commit more resources into a stable long-term framework. Here, we dive into local and county efforts to fund and protect drinking water in Iowa.

The two most populated counties in Iowa have passed bond referendums to protect and promote natural resources and outdoor recreation. Linn County, home to the Cedar Rapids metro area, passed a $40 million bond in 2016 for trails, parks, and water quality and land protection. In 2012, Polk County, home to the Des Moines metro, passed a similar $50 million bond. Both ballot measures passed with more than 70 percent support from voters. These measures allow not only for renovations and improvements but for technical staff and water quality monitoring.

How can rural areas compete on addressing water quality when they do not have the tax base to leverage, like urban areas? Some options include local sales tax initiatives, public-private partnerships, and other special projects.

The regressive nature of sales tax is one criticism of raising the sales tax statewide to fund water quality projects. One bill introduced during the last legislative session aimed to strike a balance. The WISE bill introduced in 2017 coupled a sales tax increase with a proportional decrease in income taxes. The three-eighths of a cent sales tax increase would be phased in over three years to slow the pace of any negative impacts. The bill would also require 60 percent of funding to go toward practices outlined in the Nutrient Reduction Strategy. This design ensures that more sales tax revenue generated in urban areas would be invested in rural areas. There are already a few examples of metro areas funding projects in rural parts of the county using bond funding. (More details on the WISE bill can be found here.)

Public-private partnerships work for targeted projects with specific goals. One example is the many oxbow restorations completed by The Nature Conservancy alongside a number of different watershed groups in Iowa. The Nature Conservancy works with a watershed coordinator, technical staff, landowners, and sometimes municipal or county staff to site and develop an oxbow to slow and retain the flow of water in a stream.

Another example are the initiatives undertaken by Elliott, Remsen, and Sioux Center to protect drinking water for their towns with the Iowa Source Water Ag Collaborative. In each case, the town worked with the Iowa Department of Natural Resources to identify the source of their water quality issues and took on targeted projects to address them.

I hope readers can learn through this series what kind of resources are available to address water quality in their area. A variety of resources are available and trained staff can help communities improve their drinking water, but only with a shared commitment to address the problem. I plan to continue writing and highlighting more stories of the people and places taking on this challenge. Stay tuned! Read more about Local efforts to address water quality add up

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Center for Rural Affairs November and December newsletter

This edition of our newsletter focuses on PROGRESS that strengthens rural communities, small businesses, and family farms and ranches. 

Our Byway of Art project demonstrates the history, arts, and culture of three rural towns. Residents of Decatur, Oakland, and Lyons embraced community-driven art and now have projects for future generations to enjoy.  Read more about Center for Rural Affairs November and December newsletter

Value-Added Producer Grant funds available

At Robinette Farms, funds from the Value-Added Producer Grant (VAPG) program help pay for processing, marketing, distribution, and sales of pasture-raised chickens, eggs, and microgreens.

This year, $18 million in funding is available through the U.S. Department of Agriculture’s (USDA) VAPG program. Paper applications are due Jan. 31, 2018, and electronic applications through www.grants.gov are due Jan. 24.

Robinette Farms is a small farming operation near Lincoln, Nebraska, that received a working capital grant in 2015, and now sells meat and produce at local grocery stores. They were able to develop new products and access higher-value markets with the assistance from the VAPG program.

Administered by USDA Rural Development, the VAPG program provides grants to producers for working capital, feasibility studies, business plans, and marketing efforts used to establish value-added businesses. Value-added grants can also be used to develop new product lines from raw agricultural products or promote additional uses for established products.

Independent producers, agricultural producer groups, farmer or rancher cooperatives, and majority-controlled, producer-based business ventures are all eligible to apply for these grants.

The program prioritizes funding for applicants who are beginning, veteran, or socially-disadvantaged farmers and ranchers; operators of small- and medium-sized family farms and ranches; farmer and rancher cooperatives; and majority-controlled, producer-based business ventures whose projects “best contribute” to creating or increasing marketing opportunities for the aforementioned groups of farmers.

Contact your local USDA Rural Development office or visit www.cfra.org for more information.

Feature photo: Crystal Powers, co-owner and co-operator of Darby Springs Farm near Ceresco, Nebraska, gives a tour of their microcreamery in August. She and her husband, William, received a $50,000 value-added grant in 2015 to create and expand their farmstead ice cream and milk carmel topping made from ingredients grown or produced on the farm. Their micro-creamery features a walk-through milking station and three separate rooms - one for milk, one for ice cream, and one for a store. Read more about Value-Added Producer Grant funds available

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27 Iowa farmers sign farm bill letter

Twenty-seven Iowa farmers, in support of conservation and crop insurance practices in the 2018 farm bill, signed and sent a letter to Iowa Congressional Representatives in October. Would you like to get involved in advocating for change in the farm bill? Reach out to Anna today at 515.215.1294, or annaj@cfra.org.

Oct. 9, 2017

Dear Sens. Chuck Grassley and Joni Ernst, and Reps. Steve King, Dave Loebsack, David Young, and Rod Blum,

As farmers in Iowa, we write to you with concerns about the future of conservation in our state. Conservation practices, such as planting cover crops, have been enormously beneficial for our operations. We write to share ideas with you about how to further encourage farmers to practice conservation practices in Iowa, and ask that you please take these suggestions into consideration during your deliberations about the farm bill.

First, we have seen conservation practices can actually work to reduce on-farm risk. Measures such as planting cover crops, engaging in no-till, and planting a diverse crop rotation can help build soil health, which, in turn, can both encourage resilience to drought and reduce soil erosion and nutrient runoff. But, although these practices can help manage on-farm risk, and could potentially reduce our crop insurance costs and claims in the long run, crop insurance policies provide disincentives to practice conservation.

We believe crop insurance should work hand in hand with conservation policy. Specifically, we believe that farmers who develop strong conservation plans and implement improvements should be eligible for higher levels of premium subsidy than those who do not. This also would benefit taxpayers by offering them assurance that the dollars spent on crop insurance premium subsidies are investments in making our land more resilient and productive for future generations. We ask that, in the upcoming farm bill, you create an incentive under the crop insurance program to offer farmers higher premium subsidies for practicing conservation.

Another change in the next farm bill that would encourage conservation is to remove barriers within crop insurance policies to planting cover crops. Currently, in order to continue to qualify for crop insurance while still planting cover crops, farmers must follow special rules and terminate their cover crops on a particular timeline. These extra regulations serve as a disincentive to plant cover crops. We ask that the upcoming farm bill require crop insurance companies to treat all conservation practices recognized by the Natural Resource Conservation Service as “good farming practices” under crop insurance regulations.

Finally, we ask that you protect existing conservation programs under the Natural Resource Conservation Service, particularly working lands conservation programs such as the Conservation Stewardship Program and the Environmental Quality Incentives Program. These programs provide important support for farmers who are interested in incorporating conservation practices into their operations but need extra support in order to afford it.

As Iowa farmers, we believe these ideas are good for farmers, good for Iowa, good for our rural economies, and good for our soil and water. Please provide strong support for conservation in the upcoming farm bill work. Thank you for your consideration.

Signed,

Nathan Anderson, Cherokee County

Kent Bennis, Clinton County

Charles Bieber, Allamakee County

Tim Blair, Van Buren County

Jerry Depew, Pocahontas County

Troy Deutmeyer, Delaware County

Kipp Fehr, Palo Alto County

Gary Fisher, Humboldt County

Bo Fox, Monona County

William Furlong, Johnson County

Larry Haren, Hamilton County

Brian Heide, Calhoun County

Keith Kuper, Hardin County

Levi Lyle, Washington County

Dennis Nebendahl, Allamakee County

Mark Peterson, Montgomery County

Clark Porter, Black Hawk County

Jeff Pudenz, Sac and Greene counties

Daniel Rosmann, Shelby County

Loran Seiser, Hamilton County

Zack Smith, Winnebago County

Jerry Sobotka, Pocahontas County

Kim Steele-Blair, Van Buren County

Max Trimpe, Johnson County

David L. Williams, Page County

Ray Wilson, Cass County

Bill and Dotty Zales, Plymouth County Read more about 27 Iowa farmers sign farm bill letter

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Jobs sweep into region with wind development

Wind energy continues to grow in the U.S., especially in the heart of the country. With some of the best renewable resources available, this region has significant potential to generate clean energy while also reaping the benefits of development.

Those benefits take several forms, including direct payments to landowners that provide a new source of income. Projects also generate new tax revenues that broaden county tax bases or assist in funding essential services like fire and police departments, as well as local schools. New jobs are another benefit, either in the form of construction jobs when a project is being developed or as operations positions for the lifetime of a project.

Employment opportunities created by new wind development have a big impact on rural communities. According to the National Renewable Energy Labs’ Jobs and Economic Development Impact modeling, a 100 megawatt (MW) project can employ up to 106 people for construction and construction-related services. These workers infuse new money into local economies when they stay in communities during the building phase.

To capture the benefits of wind development, we will need a workforce to help build projects. In states like Wyoming where wind energy development is still growing and resources are abundant, finding workers can present a barrier to building new projects in rural areas. Small population sizes make it difficult to find enough workers locally to construct wind farms.

The construction phase isn’t the only part of wind energy development that is creating workforce demands. Once projects are built, they will require occasional maintenance from technicians on-site. Wind turbine technician is one of the fastest growing professions, according to the U.S. Department of Labor, and much of that is due to the expected growth of the wind energy industry.

These long-term operation jobs offer another benefit to rural communities – the chance for young people to return. Many of these jobs are based in or near small towns where wind energy projects are built. The growth of wind energy has created opportunities to bring new, well-paying jobs to rural areas, paving a path for young people to pursue careers in an expanding industry.

As wind energy continues to grow, there will be more possibilities to localize benefits of wind development. Whether it is from jobs based in communities near wind farms or the use of local labor and construction services while a wind farm is under construction, wind energy will continue to be an economic driver in rural areas.

Photo: Laredo Ridge Wind Farm near Petersburg, Nebraska, will generate more than $6 million over the first 20 years of operation to local taxing bodies and has eight permanent employees, according to NRG. The system went online in January 2011. | Photo by Rhea Landholm Read more about Jobs sweep into region with wind development

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