1. Tackling Challenges Facing Farmers & Ranchers
Welcome to Nebraska
Introduction
2019 AgrAbility National Training Workshop Lincoln, Nebraska

2. CHALLENGES Securing the next generation Keeping farmers farming
why are these important?
1 in 4 jobs in NE is related to agriculture (farming, ranching, agribusiness)
Among the leading producer of corn and cattle nationally for many years
#1 cattle on feed
#1 popcorn (45% of US popcorn supply is grown in NE)
#1 Great Northern Bean production
#3 corn for grain production

3. Challenge 1 - Securing the next generation
BEGINNING FARMER TAX CREDIT ACT
Neb. Rev. Stat. §§ to
REGULATIONS
Title 91, Nebraska Administrative Code, Chapter 1
SECURING THE NEXT GENERATION OF FARMERS AND RANCHERS
Concerned about our aging population of farmers and ranchers.
Who are our future farmers – what challenges do they face? Competition with established farmer, capital intensive
How can we help secure the next generation?

4. nextgen.nebraska.gov Karla Bahm Nebraska Department of Agriculture
Supporters – farm organizations, ag bankers, commodity associations (livestock commodity groups, corn growers, soybean growers, etc)
Karla Bahm
Nebraska Department of Agriculture

5. NEBRASKA INCOME TAX CREDIT Personal Property Tax Exemption
Finance Course Reimbursement
tax credits for owners - finance class reimbursement - personal property tax exemption
Tool for beginners / incentive for owners

6. Tax credit is the most used
Needed: Beginning Farmer – Asset Owner – Nebraska Asset - Lease (minimum of 3 years)
Benefit to BF – access to asset for 3 years, long term relationship, possible successor, learn skills, build equity
Benefit to AO – 3 years of NE refundable tax credits, pay-it-forward help a beginner, opportunity to mentor a beginner

7. Eligibility Requirements
Beginning Farmer
Eligibility Requirements
Nebraska resident
Farmed <10 of 15 years
<$200,000 family net worth
Majority of labor and management
Intent to farm full-time
Experience / Education
Approved finance course

8. Eligibility Requirements
Asset Owner
Eligibility Requirements
Owner of the asset
File Nebraska Income Tax Return

9. a s s e t s
assets: row crops, pasture land, cow/calf share (beef / dairy)

10. a s s e t s
livestock facilities, equipment, machinery, storage facilities

11. TAX CREDITS Cash Rent: Share Crop: $50,000 x 10% = $5,000
200 acres x $250/acre = $50,000
$50,000 x 10% =
Share Crop:
200 acres x 200 bu/acre x $3.50/bu = $140, $140,000 x 50% x 15% =
$5,000
Review how tax credits are determined; refundable tax credit, issued annually for each year of the 3 year lease
Forecasted market price tool set by Board
$10,500

12. FAMILY Applicant Succession Workshop Succession Plan Great
Grandparents
Grandparents
Parents
Aunts
Uncles
Applicant
Siblings
Children
Related parties – succession plan requirements: attend workshop; have a written succession plan
Children
Grandchildren
Succession Workshop
Succession Plan
Great Grandchildren

13. SUCCESSION PLAN
Written, signed document between the beginning farmer and the asset owner setting forth a process and timetable that provides a reasonable manner and probability of successful transfer of assets to the beginning farmer.
May include conditions, benchmarks and performance measures.
What is a succession plan?
Planning is complex
Do I want a successor – who will it be
Transfer the assets or pass on a business
Fair vs equal – multiple siblings
Communication – Communication – Communication
Workshops – one-on-one clinics

14. APPLICATION PROCESS Submit application & required documents
Review & prepare for board
Presented to board for approval
Applications for BF & Owner – download from website
BF Docs –
Net Worth Statement – Balance Sheet
Projected Cash Flow Analysis
Review application process:
NDA’s administrative role;
Board make-up;
approval process

15. 2015 Survey

16. 2015 Survey

17. By the Numbers
$12.5m tax credits ( ) 450+ beginning farmers 79,000+ acres ( ) $70,000 annual administrative budget

18. Win for the asset owner – they helped a beginner get started
Win for the beginning farmer –
Win for Nebraska
nextgen.nebraska.gov

19. Challenge 2 – Keeping farmers farming
USDA GRANT FUNDED PROGRAM
Agricultural Credit Act of 1987
FARM MEDIATION ACT
Neb. Rev. Stat. §§ TO
REGULATIONS
Title 91, Nebraska Administrative Code, Chapter 2
Ag crisis of 1980s

20. negotiations.nebraska.gov Karla Bahm
Nebraska Department of Agriculture

21. USDA CERTIFIED AGRICULTURUAL MEDIATION PROGRAMS
CAMP – 41 certified ag mediation programs
AgrAbility client
Not meeting financial obligations because of an accident / disability

22. MEDIATION
Who
What
Why
Where
When
How

23. MEDIATION Who What producer borrower creditor USDA agency
agricultural credit
USDA adverse decisions
lease disputes
family farm transitions
farmer/neighbor
organic certification

24. MEDIATION Why When/Where How alternative to litigation confidential
cost effective
quick resolution
parties generate solutions
preserve relationships
resolution
When/Where
45-60 days
neutral location
How
request
notification
preparation

25. MEDIATION Process/Preparation Intake Clinics Financial Analysis
Intake – is your issue right for ag mediation or mediation in general; what is the issue; do you need help to prepare, where might you get that help; we can provide resources (mental health, legal etc)
Clinics – free consultations with farm law attorney and financial counsel to discuss your specific issue
Financial analysis – free in-depth look at the farm’s financial statement and cash flow, help evaluate the overall picture and look at restructuring and refinancing possibilities
Importance of preparation

26. MEDIATION Mediation Session Introductions Describe the Process
Set guidelines for dialogue
Allow parties to be heard
Identify and clarify issues
Problem solving
Test solutions
Draft agreement
Review Period

27. GOAL - RESOLUTION
negotiations.nebraska.gov

28. Nebraska Department of Agriculture
Thank you!
Karla Bahm
Nebraska Department of Agriculture