By Matt Reese
House Bill 183 was recently introduced by state representatives Susan Manchester (R-Waynesfield) and John Patterson (D-Jefferson) to create a tax credit program that would incentivize retiring farmers to sell or rent to beginning farmers in Ohio.
“I am grateful for the opportunity to introduce this legislation with Rep. Patterson who will help bring the next generation of Ohio farmers into the agricultural industry and ease the financial burden for retiring farmers,” Manchester said in an April 10 press conference. “I’ve seen this scenario played out first hand in my own district where retiring farmers without family successors are looking for someone to take over their operation but face tough financial barriers when selling their land or assets. This program would incentivize retiring farmers to look to beginning farmers to take over their operations by decreasing their tax burden on selling or renting their land and assets. It would also set beginning farmers up for success by giving them the opportunity to farm and learn best practices through a financial management program.”
The language in HR 183 is modeled after a similar 2018 program in Minnesota that has already encouraged 162 established farmers to sell or rent to beginning farmers for a total of $1.4 million in tax credits. Proponents are hoping the Ohio program will have similar success.
“Established farmers and ag producers would receive a state income tax credit when they sell or rent agricultural assets like land, machinery, building facilities, or livestock to a beginning farmer. The credit is equivalent to 5% of the sale price, 10% of the cash rent or 15% for a cash share deal,” said Jenna Beadle, director of state policy for the Ohio Farm Bureau Federation. “Beginning farmers could also receive a tax credit up to $1,500 for taking a qualified financial management course but do not receive tax credits for buying land or other farm-related items. A beginning farmer is defined as an Ohio resident who has been farming for less than 10 years with a net worth of less than $800,000 and cannot be a relative of the established farmer.”
Ohio Farm Bureau, Ohio Farmers Union and the Ohio Ecological Food and Farm Association are supporting the bill. The program will likely have a proposed $10 million cap over 5 years, at which time the program can be renewed if it has been successful. The Ohio Department of Agriculture would determine the eligibility of candidates and the organizational framework for the program. The young farmer candidates must provide the majority of labor on the farm.
“Farming is a very financially challenging occupation to get into,” Patterson said in the press conference. “The idea is to help our young people now and make this this transition into farming because it is our No. 1 industry in the state of Ohio. We recognize that and we celebrate opportunities for our young people to go into farming.”