Federal leaders in the House and Senate have stated they are close to passing a new five-year farm bill.
There will be a farm bill this year, but it’s not clear whether that bill will be some sort of extension of the existing bill or a new bill, said Karl Zulauf, agricultural economist for Ohio State University. The current farm bill has been extended through the end of January.
“If they had a farm bill, it would be on the floor for a vote,” he said. “I would think the last remaining issues are the most divisive.”
Both the Senate and the House have passed farm bills this year, but they differ on how much to cut the nation’s food-stamp program and how to restructure farm subsidies.
The bill is expected to have additional cuts to the food-stamp and nutrition programs and expansion of crop-insurance alternatives. Neither party is providing much detail about specifics of what the bill contains.
Traditionally, the farm bill has been nonpartisan with both Democrats and Republicans supporting it, Zulauf said.
The recent negotiations over the budget bill provide some hope for compromise, he said. “We’re a very divided nation right now, not just a very divided Congress,” Zulauf said.
Another piece of legislation that will impact farmers is the expiration in 2014 of the depreciation credit for the purchase of agricultural equipment, said David Marrison, extension agent for Trumbull and Ashtabula counties.
For this year, the credit is for equipment purchases of up to $500,000, he said.
A bill has been introduced in the U.S. Senate that would make permanent a depreciation credit of up to $1 million per year, Marrison said. It is unclear whether the legislation will move forward.
“There are also some weird things in this bill; for example, with tiling you would be able to write off 44 percent of the cost in the first 15 years, but it would take 144 years to write of the full cost,” he said.
Tile doesn’t last 144 years, and keeping up the consistent replacement of the material could get confusing, Marrison said. The bill as proposed also would remove the 15 percent depreciation tax credit, he said.
A number of area farms are hoping to use the credit for royalty payments for oil and gas revenues. If the bill is passed, property owners would have to pay taxes on all royalty payments.
Associated Press reports contributed to this story.