Wisconsin Dairy Farmer to GOP: Your Estate Tax Claims Are Bogus

Jim Goodman

The mys­tique of the fam­i­ly farmer in this coun­try goes all the way back to Thomas Jefferson’s mod­el for democ­ra­cy. Jef­fer­son cen­tered his vision on the yeo­man farmer, who, with fam­i­ly labor, worked a small farm and embod­ied the virtues of hon­est and hard work. It was an impor­tant idea to a new nation that was sup­posed to be built on inde­pen­dence and fair­ness — not aris­toc­ra­cy and privilege.

The idea of the yeo­man farmer has evolved into the present-day notion of the fam­i­ly farm, a life few Amer­i­cans under­stand but one that they seem to hold dear and want to pre­serve: The fam­i­ly farmer cares for the land, the ani­mals and the local com­mu­ni­ty because that is their her­itage. It’s no won­der that food pack­ag­ing depicts that image of the fam­i­ly farm, with lit­tle red barns, cows and chick­ens in the grass and the farm fam­i­ly work­ing togeth­er — it sells. This image has noth­ing to do with how the vast major­i­ty of food that fills super­mar­ket shelves is pro­duced, but that hasn’t stopped politi­cians from invok­ing the fam­i­ly farm when sell­ing the pub­lic on poli­cies that have lit­tle to do with those of us who still do the work of fam­i­ly farming.

As Repub­li­cans push ahead with their tax reform plan, the small farmer is again invoked. This time it’s about the estate tax. Dur­ing a speech in North Dako­ta, Pres­i­dent Trump declared, We’ll also pro­tect small busi­ness­es and fam­i­ly farm­ers here in North Dako­ta and across the coun­try by end­ing the death tax.” He added: Tremen­dous bur­den for the fam­i­ly farmer, tremen­dous bur­den. We are not going to allow the death tax or the inher­i­tance tax or the what­ev­er-you-want-to-call-it to crush the Amer­i­can Dream.”

But few farm­ers put the elim­i­na­tion of this tax on the top of their wish lists. Only about 20 farms a year are sub­ject to any inher­i­tance tax, and in almost all cas­es, those farms have ade­quate liq­uid assets to cov­er the tax­es with­out hav­ing to sell any part of the busi­ness to do so. After search­ing for 35 years for one exam­ple of a fam­i­ly farm that was lost due to the estate tax Iowa State pro­fes­sor Neil Harl stat­ed sim­ply, It’s a myth.”

It is a sales pitch, noth­ing more, again cap­i­tal­iz­ing on that mys­tique of the fam­i­ly farm that peo­ple hold so dear. Get­ting rid of the estate tax is a gift to the very rich, not to farm­ers. As the old say­ing goes, ask a farmer what they would do if they won a mil­lion dol­lars: Keep farm­ing till it ran out. While estate tax­es are not a threat to the fam­i­ly farm, we face plen­ty of oth­er chal­lenges. But you’ll nev­er see politi­cians tack­le the great­est threat to the fam­i­ly farmer: unfair­ly low prices for our products.

Farm­ers, no mat­ter what they pro­duce, are always encour­aged to pro­duce more, with no ques­tion how much might be too much. Agri­cul­tur­al research focus­es on increased yield, be it milk, corn, soy, poul­try or any oth­er agri­cul­tur­al com­mod­i­ty. Cur­rent gov­ern­ment poli­cies encour­age increased agri­cul­tur­al pro­duc­tion as a means of eco­nom­ic growth because a grow­ing gross domes­tic prod­uct sup­pos­ed­ly means a healthy econ­o­my. The days of gov­ern­ment sup­ply man­age­ment poli­cies that kept sup­ply in bal­ance with demand, thus help­ing main­tain fair farm prices while ade­quate­ly sup­ply­ing mar­ket needs, end­ed dur­ing the Rea­gan admin­is­tra­tion. It’s all about feed­ing agribusi­ness and the glob­al econ­o­my. Local economies and rur­al com­mu­ni­ties? Not so much.

Small farm­ers, ranch­ers and fish­ers are caught in an increas­ing­ly con­sol­i­dat­ed food sys­tem. Increas­ing mar­ket con­cen­tra­tion through cor­po­rate merg­ers gives us lit­tle choice but to buy from a lim­it­ed group of input sup­pli­ers and sell to a lim­it­ed num­ber of buy­ers. And again, small farms are impact­ed most severe­ly. Often, I can’t find things I need for my farm in the local stores. Small farm­ers aren’t worth the both­er, I guess. Mega-organ­ic dairies have sat­u­rat­ed the mar­ket and cor­nered the super­mar­ket trade. My milk price has dropped by 30 per­cent in the past year, while the aver­age retail price for a gal­lon of organ­ic milk has gone up 25 per­cent, accord­ing to USDA figures.

If you are mar­ket­ing hogs by the semi-load, you will have bet­ter mar­ket access. If you are sell­ing 60,000 pounds of milk a day (I sell 1,500 pounds), you’ll prob­a­bly get paid a siz­able vol­ume pre­mi­um. Farms got big­ger to gain the advan­tage of econ­o­my of scale. They still may be fam­i­ly owned, but there are few red barns or ani­mals on pas­ture. Corn and soy are in such over­sup­ply that farm­ers, even on the largest farms, are lucky to recoup their pro­duc­tion costs. So tax­pay­ers are help­ing prop up low grain com­mod­i­ty prices through the gov­ern­ment sub­sidy pro­grams: Farm­ers get a gov­ern­ment defi­cien­cy pay­ment when prices are low. This works well for the inter­na­tion­al grain com­pa­nies. They can pur­chase cheap grain, know­ing that next year, farm­ers will keep plant­i­ng because sub­si­dies will keep the farms afloat.

While sub­sidy pro­grams are at best a very poor solu­tion to a very big prob­lem (low farm income), the real ben­e­fi­cia­ry of the sub­sidy pro­gram has always been the cor­po­rate grain buy­ers and the dairy and live­stock proces­sors. Farm­ers only want a fair price for what they pro­duce, not gov­ern­ment pro­grams that encour­age over­pro­duc­tion of low-priced com­modi­ties. The U.S. agri­cul­tur­al econ­o­my has and always will be designed to ensure cor­po­rate agribusi­ness prof­its at the expense of farm­ers and con­sumers. We, the farm­ers, will of course, be expect­ed to remain silent, work hard­er and avoid dis­sent in a nation ruled by an admin­is­tra­tion that will not tol­er­ate dissent.

The nos­tal­gia and fas­ci­na­tion with the fam­i­ly farm is grat­i­fy­ing for those of us who still run a fam­i­ly farm, but sad­ly that doesn’t help pay the bills. In time, the fam­i­ly farm will exist only in nos­tal­gic illus­tra­tions on milk car­tons at the super­mar­ket, and in the false promis­es of politicians.

Jim Good­man is a retired dairy farmer from Wonewoc, Wis.

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