Tag: dairy reconciliation

NMPF Lauds Dairy Policy Provisions in House Ag Reconciliation Package

Posted on by Rachel Ravencraft

The National Milk Producers Federation today lauded the inclusion of critical resources in the House Agriculture Committee’s reconciliation proposal that would boost the agricultural economy and provide farmers certainty.

“We commend Chairman GT Thompson and committee members for advancing important investments that will help support and create opportunities for dairy,” said Gregg Doud, president and CEO of NMPF. “We will work with lawmakers to advance these provisions through Congress, knowing that dairy is well-served by what the House Agriculture Committee is approving.”

NMPF is pleased that the bill extends the Dairy Margin Coverage program through 2031, providing dairy producers with much-needed continuity. The package also bases the program’s production history calculation on a farmer’s highest production year out of 2021, 2022, or 2023, an update that better reflects recent on-farm production levels. The bill also funds mandatory USDA dairy processing plant cost surveys every two years, which will better inform future make allowance conversations. Finally, it includes long-term resources for important trade promotion, conservation, research, and animal health programs.

The legislation, which is expected to be approved today by the House Agriculture Committee, will ultimately be folded into a broader budget reconciliation package that will include an extension of current tax policies, among other areas. NMPF supports House Ways and Means Committee language to make the Section 199A tax deduction permanent, which will allow dairy cooperatives to continue to either passing the deduction back to their farmer owners or reinvesting it in their cooperatives.

“Whether it’s risk management or tax issues, the stakes are enormous for Congress to get the policy right in this legislation,” Doud said. “House committees have done good work this week to start major elements of this bill on the right track for dairy farmers and the cooperatives they own.”

Stepped-Up Basis Survives First Hurdle After NMPF, Farm Groups Pressure

Posted on by Theresa Sweeney

NMPF and other farm groups have thus far successfully protected the current tax policy referred to as “stepped-up basis” during the ongoing budget reconciliation negotiations, with the House Ways and Means Committee excluding any change to current policy in its contribution to the reconciliation package.

The reconciliation bill, which has been actively worked on since August, will only pass Congress with unanimous support from Senate Democrats and near-unanimous backing from their House counterparts, due to united Republican opposition. Reconciliation has become the vehicle for the Democratic legislative agenda, and its final form will include critical provisions to raise the revenue required to pay for various programs and projects.

One proposal initially floated to raise these funds was to change when capital gains on inherited assets are taxed as well as altering the basis for evaluating the amount of capital gains to be taxed. NMPF and other farm groups have been working to prevent these proposed changes from becoming law and protect stepped-up basis.

While many provisions currently in the mix for the final reconciliation package are popular within agriculture – such as funds for rural development, climate change research, biofuel investment, and forestry – agriculture has solidly opposed any proposals to eliminate or otherwise change stepped-up basis because it would likely increase taxes heirs have to pay on inherited farm assets. NMPF and the agriculture community are hopeful the committee’s preservation of current policy will be maintained in the final package and will continue work to ensure that outcome, although circumstances can change rapidly as last-minute negotiations occur.

One area of special interest to dairy — funding for conservation programs with emphasis on climate-smart ag practices — will likely be included in the bill. The plan will invest nearly $28 billion in such programs, which will benefit dairy’s proactive sustainability efforts to become carbon neutral or better by 2050 and to improve water quality and optimize water use. NMPF previously led 12 agricultural and conservation organizations in advocating for this important new funding.