Starting farming

[dcfirefighter]

very nearly impossible these days, am I correct?

One (of many) reasons is the tax code. I pulled this from 'AG Weekly', as taxes, especially related to real estate, are an interest of mine: Tax provision blamed for soaring land prices.

I cross posted this to another (progressive) group I take part in, and recieved a link to a statistical paper showing a correlation between relatively high property taxes and 1) output, 2) distribution of farm size & value. It's rather boring, but it basically shows that low property taxes encourage investors, 'gentleman farmers', and the like to bid up land prices in an effort to purchase a tax shelter. In states with high property taxes, the farms are smaller and higher yielding.

The recommendation is to reduce taxes on buildings, and increase them on land:
1) 'Small' farms typically have similar buildings as huge farms, or rather small farms have a relatively large building value compared to large farms. Decreasing the tax on buildings would benefit small farms more than large ones.

2) Increasing the tax on land, enough to make up the decreased revenue from buildings, decreases the desireability of farmland as a tax shelter. Basically, it kicks the posers out, leaving only the real farmers.

Any thoughts from real farmers?

[H2O Man]

1. In the 1970s in the

northeast, we experienced the "investment" phase of corporate dairy farming. People with a wide range of investments, in need of a tax write-off, bought out many of the dairy farms in central (upstate) New York. They ran them at a loss. This gave them a hefty write-off, and allowed them the opportunity to knee-cap the family farms they were "competing" against. There were significant amounts of money hidden in the "e.t." (embryo transplant) phases of their operations. The infamous example of Yoko Ono selling a cow at the NYS Fair circa 1978 for $345,000 was enough to make most of the people who worked farms realize that there was more going on than milk production.

After running the once high quality farms into the ground, many were then sold off for developments of summer homes, etc. A lot of the dairy industry was moved to another part of the country that does not have water table to support or sustain the dairy industry on a long-term basis. At the same time, the northeast has seen a decline in the family farms that once supplied much of the country with milk products.

It's a sad state of affairs.

[creeker]

10. NOT YOKO ONO--- A true liberal who should not profit from the poor farmers

problems

[Dogmudgeon]

2. The downside of Georgist economics?

Georgist economics isn't particularly good for smallholders -- unless/until it becomes widespread. Which is probably one of the indicators why it's becoming more "do-able" in our era. The number of private, "small" farmers is shrinking, and their numbers will possibly reach zero this century.

The story you cited in AgWeekly is about a special, preferential tax shelter. Simply eliminating the shelter would kick many of the investors out -- but the older farmers, facing retirement, want the law, since it improves their chances of selling their land and increasing their financial return. In essence, it establishes a system of privilege -- and Henry George was a strong opponent of legal privilege in any form. The Land Tax (or Land Rent) doesn't apply to this particular part of the argument (though it would apply in a macroeconomic sense).

In a Georgist society, land rents/taxes would work against small farmers, who would have to increase their produce prices, and have a smaller margin of error than agribiz. If some or most of the land tax proceeds were to be redistributed to the people (including the small farmers), that would take some of the pressure off, but their lives would still be complicated by their attachment to the land.

And while I'm at it, I should emphasize that farmers often have an intense sense of ownership of their land. No way are they going to support a new economic system based on "socialized" land holding and rent/tax collecting -- unless they were convinced that they would have more security on more-heavily taxed land.

The price of food would increase to the consumer, and would probably stay fairly high until the pressure to grow on less land (and thereby avoid land rent/tax) fully kicked in. People would get their George Dividend and put it right back in to buying food, and paying their own land use fees for their homes and/or their landlord's tax bills.

Like you, I believe that a Georgist system would be preferable to the one we have today, but I don't think we should ignore the fact that it would entail considerable upheaval. A transition plan would have to be put in place, perhaps starting with royalties on non-land grants of title (corporate charters, "intellectual property" and the like). The land fees could then be phased in at a pace that wouldn't strain family budgets, and that would allow small farmers time to adjust their "business models".

But I am fairly certain that the farmers will never go for it, until their breed is finally wiped from the American soil by agrigiz. Imagine the pain suffered by Midwestern farmers in the 1980s -- multiply that by one hundred, and that's the kind of resistance a Georgist Land Tax would encounter in Rural America. But in 30, 50 years -- there may be no small agricultural landholders left to trouble.

--p!

[dcfirefighter]

3. Not necessarily looking for the full monte, if you will.

No doubt a full shift would be disturbing, to say the least. I'm more so interested in the 'initial' shift of merely shifting building taxes to land. In a jurisdiction populated largely by farms, the large farms tend to have a higher ratio of land value to building value than the small farms (e.g. they all have similar structures: home, barn, silo, shop, etc. - one has 100 ac, the other has 600 ac). Such a shift would benefit the smaller farm.

As for the 'full' shift, I expect it would take place in cities first - which, unfortunately for the retiring farmer, would decrease the value of his holdings (though make it easier to pass on to his children).

Interestingly, in the study linked, the 'high tax' states showed a more egalitarian distribution of farms than in the 'low tax' states. And those are all full property taxes, not merely land taxes.

[TheFarseer]

4. my advice is to not consider farming as a career

unless your dad or whatever is a big farmer who is willing to help you get started and you can get his land eventually. Start up costs are far too high, getting land to farm is very difficult for a new-comer, and contrary to what alot of people think, not just any dumbass can decide he wants to farm and know what they are doing. Taxes are the least of your worries.

not to mention the farm economy totally sucks right now and will probably only get worse and I don't know how even established farmers would hang on without subsidies.

[Boojatta]

5. Why not reduce taxes on farmland and also reduce subsidies?

...low property taxes encourage investors, 'gentleman farmers', and the like to bid up land prices in an effort to purchase a tax shelter. In states with high property taxes, the farms are smaller and higher yielding.

The recommendation is to reduce taxes on buildings, and increase them on land...

If the subsidies create an excessive incentive for people to purchase farms as tax shelters and become posers rather than real farmers, then surely the simplest way to reduce that incentive is to reduce the subsidies. If a reduction in subsidies would squeeze farmers financially, then why not begin by reducing the various taxes that farmers pay?

To maintain current subsidy levels and also increase taxes on farmland sounds a bit like turning on the heating system and then, when you are too hot, turning on the air conditioner instead of turning off the heat.

[godhatesrepublicans]

6. expantion on this question; how about small subsistance farms?

I occasionally think about doing the old fasioned "back to the land" thing with 10 acres somewhere and just be a hermit growing enough to live on. Is that even possible anymore with taxes and such? (Yes, I know I'd probably starve to death the first winter, most early Colonists did, but it's still a dream of mine...)

[creeker]

7. Yeah I had that idea--- hard to do in todays social structure---

The days of running thru my Gran parents garden as a child--Grandmother always had a row of Flowers in the garden.That is gone.
My family farm in my youth furnished all the protein,raw milk,and veggies that we needed. The catch was that the tax on the land was very little----not so easy to do today-- but the idea of a "cooperative Farm" comes to mind--- people buy shares in the crops---the potential is tremendous

[nosmokes]

8. Here in Oregon we actually have more farmers and ranchers today than

20 years ago, thanks to the popularity of the buy local/organic movement. no one is getting rich, but it is possible to make a living. you'll need a second income unless you get lucky and get a nice restaraunt or butcher supply contract. but land costs are still relatively reasonable. but, like any farm anywhere, you'll earn every penny you make.

[Sanctified]

12. Nosmokes where are you located in Oregon.

I plan on buying a small hobby farm sometime in the future and have had a hard time locating anything in Oregon, pricing on land is quite expensive. I have been looking at Montana but would love to stay in Oregon if I can find something reasonably priced.

[Tsiyu]

9. Start small

We raise our own eggs, lettuce, tomatoes, peppers, squash, garlic, sage, kale, beans, etc, etc.

Organic growers are also starting small.

The trend in rural areas is toward those which offer local recreational amenities, which means many folks are capitalizing on the tourist/farm type operation (Pumpkin patch where kids take hayrides, pick-your-own blueberries, country wedding chapel, greenhouse specializing in medicinal herbs and offering classes.)

As for individuals, the tables here will show you which farms are owned by individuals/families/sole proprietorships: Click for the state you want, look under Farm Characteristics/Farm organization

http://www.ers.usda.gov/StateFacts/

[ruralmom]

11. The govt. can help

Go to your USDA office, they can help. They give me money not to plant crops.

[pipoman]

13. Starting farming isn't completely impossible

but it is like buying an income. For the investment of time and money compared to the return on the investment and the value of your time, even if you know how to farm effectively, it must be a complete labor of love.

To buy a small acreage and expect to raise your own beef is impossible unless you have enough land to sustain the steer(s)during the summer and raise enough alfalfa or other nutritional grasses and grain to sustain your beef through the winter. If you have to buy your feed you will end up with great quality beef at 2 or 3 times the grocery store rate.

Raising organic can be profitable but requires quite a lot of expertise. The reason most farms don't raise organic is because of smaller yields, more pest problems, and it is very difficult to raise aesthetically pleasing products. There are a lot of record keeping requirements in marketing organic products as well.

As for hobby farming, that too must be a labor of love. It can save money if you would otherwise be doing nothing income producing with your time. Total self reliance is an expensive proposition unless you intend to live as if in the 19th century.

Just my $.02