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Tax Break Available for Beginning Farmers

The Minnesota Department of Agriculture’s (MDA) Rural Finance Authority is now accepting applications for a tax credit for the sale or lease of land, equipment, machinery, and livestock in Minnesota by beginning farmers.
 
To qualify, the applicant must be a Minnesota resident with the desire to start farming or who began farming in Minnesota within the past ten years, provide positive projected earnings statements, have a net worth less than $851,000, and enroll in, or have completed an approved financial management program.
 
The farmer cannot be directly related by blood or marriage to the person from whom he or she is buying or renting assets. The farmer must provide the majority of the labor and management of the farm.
 
The tax credit for the sale or lease of assets can then be applied to the Minnesota income taxes of the owner of the agricultural land or other assets.
 
Three levels of credits are available:
  • 5% of the lesser of the sale price or fair market value of the agricultural asset up to a maximum of $32,000
  • 10% of the gross rental income of each of the first, second and third years of a rental agreement, up to a maximum of $7,000 per year
  • 15% of the cash equivalent of the gross rental income in each of the first, second or third year of a share rent agreement, up to a maximum of $10,000 per year
 
The Beginning Farmer Tax Credit is available on a first-come, first-served basis. Applications must be received by October 1, 2021.
 
Interested farmers should note that they can also apply for a separate tax credit to offset the cost of a financial management program up to a maximum of $1,500 per year – for up to three years.

Residents Receiving Unknown Seeds from China

Residents in North Dakota and Minnesota are receiving unsolicited packages containing seeds from China. Agriculture officials in other states are also reporting similar instances, and the motive behind this action is not known at the time. The foreign seeds may be invasive and introduce diseases harmful to plants and/or livestock. Anyone receiving unsolicited seeds in the mail should retain the seeds and packing, including the mailing label. Then, the State Department of Agriculture should be contacted to report the incident and receive further instruction.

MN Farmers Must Develop a COVID-19 Preparedness Plan

The Minnesota Department of Agriculture is requiring all Minnesota farmers to have a COVID-19 Preparedness Plan in place by June 29. The plan must comply with the Centers for Disease Control and Prevention and the Department of Health coronavirus guidelines and OSHA standards. All farms and farmers’ markets must develop and implement a preparedness plan.

Farmers Advised to File Claims with Karlstad Elevator Closure

The Minnesota Department of Agriculture received notice from the Karlstad Farmers Elevator that their doors are closing. Therefore, MDA is advising farmers who have not received payment or had grain stored at the elevator to file a bond claim.
 
The elevator holds a $70,000 bond with the Department to help mitigate losses upon closure. Supportive documents such as scale tickets, purchase agreements, contracts and warehouse receipts should be included. The MDA will review all submitted claims, and the deadline is dependent on the date of non-payment.

New Radio Series Highlights Farmer Stress

Prompted by the many sources of stress currently impacting farmers and ranchers, the Minnesota Department of Agriculture and the Red River Farm Network have joined forces to create a new radio and podcast series called TransFARMation.

The series is designed to increase awareness and reduce inhibitions about acknowledging farm stress, as well as highlight the resources available. Local farmers, ranchers and agricultural stakeholders are featured, sharing personal stories and offering a message of hope.

The 60 second prime-time radio stories can be heard on all of RRFN’s 20 stations throughout Minnesota, North Dakota, and South Dakota starting the week of April 8. In addition, the in-depth podcasts can be found at www.rrfn.com/transfarmation.