Revisions Coming to the Ohio Agricultural Pollution Abatement Program?

Program revisions include new rules to address manure impacts on Ohio lakes

The Ohio Department of Natural Resources (ODNR) will hold a public hearing next week for its proposed revisions to the Ohio Agricultural Pollution Abatement Program,  a water quality program that encourages voluntary actions to manage water pollution impacts from agricultural and silvicultural land uses, provides cost-sharing for agricultural pollution prevention, and allows ODNR to take measures against those who do not voluntarily address an agricultural pollution problem.  For purposes of the program, “agricultural pollution” is the failure to use appropriate practices in farming or silvicultural operations  to abate soil erosion or water quality impacts caused by animal waste or soil sediments.  Local Soil and Water Conservation Districts are initially responsible for implementing the program, with final oversight and enforcement authority held by ODNR’s Division of Soil and Water Resources.

The rule revisions come partially as a result of the agency’s mandatory five-year review of the program.   However, several new rules–undoubtedly the most controversial proposals–are in response to the high blue-green algae levels  in Grand Lake St. Mary’s and other Ohio lakes this past summer.  Studies indicate that manure is one of the contributors to the proliferation of the blue-green algae.  A plan of action to improve the lake’s water quality developed in July by ODNR, the Ohio Department of Health and the Ohio EPA proposed several actions related to manure management, including these new rules for the Agricultural Pollution Abatement Program:

  • Declaration of a “watershed in distress.”    The rule would give the chief of ODNR’s Division of Soil and Water Resources, with the approval of the Ohio Soil and Water Conservation Commission, the authority to declare a ”watershed in distress” where the watershed has aquatic life and health that is impaired by nutrients or sediment from agricultural land uses and where there is a threat to public health, drinking water supplies, recreation, or public safety and welfare.  
  • Pollution minimization in distressed watersheds.   The  distressed watershed designation requires all owners, operators and persons responsible for land application of manure in the watershed to minimize pollution by following applicable standards, methods or management practices; failure to do so is a program violation, regardless of whether pollution actually results from the failure.  
  • Land applications of manure in distressed watersheds.  After a watershed remains designated ”in distress” for more than two years, the rule places restrictions on land applications of manure, including required prior approval from the state for applications between December 15 and March 1, injection or incorporation for manure applied to  frozen or snow pack ground before December 15 or after March 1 and limitations on applications during certain types of weather.  Additionally, all owners and operators in the distressed area must maintain 120 days of manure storage.
  • Nutrient management plans in distressed watersheds.  Each owner, operator or person responsible for producing, applying or receiving more than 350 tons or 100,000 gallons of manure annually in a distressed watershed must develop a nutrient management plan as specified by the regulations.

In response to the proposed new rules, the Ohio Farm Bureau has already indicated that, while it supports the general intent to address water quality issues in Grand Lake St. Marys, it is concerned that the distressed watershed provisions are too vague and may exceed ODNR’s scope of authority.  The legislature originally granted ODNR’s authority for the Ohio Agricultural Pollution Abatement Program in Ohio Revised Code Chapter 1511.  Interestingly, in the joint plan of state actions for water quality improvement at Grand Lake St. Mary’s, the state agencies admitted that they were asking the Ohio General Assembly to support “additional state regulatory authority” by way of approval of the proposed rule revisions by the legislature’s Joint Committee on Agency Rule Review (JCARR).  Whether this additional authority exceeds the scope of authority originally granted by the Ohio legislature is a question that JCARR will address in its review of the proposed rules.

The remaining proposed revisions to the agricultural pollution abatement program regulations intend to address a need for more rapid handling of pollution situations as well as problems identified through a program review conducted last year by an appointed advisory committee.   Other revisions in the rules package  include:

  • The inclusion of manure applicators as parties responsible for land application of manure, in addition to the current rule’s allocation of responsibility for the owners or operators of animal feeding operations. 
  • A number of changes designed to create more flexibility and efficiency in program oversight and administration by allowing earlier involvement of the Division of Soil and Water Resources.
  • An increase of cost share monies to a maximum of $30,000 and expansion of the types of practices eligible for cost-sharing;
  • A change throughout the rules from “animal waste” to “manure,” which includes animal excretia, discarded products, process waste water, process generated waste water, waste feed, silage drainage, and compost products from mortality composting, on farm biodigerster operations or animal excretia composting. 
  • Required facility modifications where seepage of animal manure occurs.
  • Changing “concentrated animal feeding operations” to “animal feeding operations” throughout the rule and clarifyingthat the program does not apply to facilities regulated through the state’s Livestock Environmental Permitting Program or NPDES permit program.

The ODNR has posted the rules package and supporting materials on its website.  The public hearing for the rules proposal will take place on November 8, 2010.

2011 Ohio Farm Management Conference

OSU Extension and The Ohio State University’s Department of Agricultural, Environmental, and Development Economics Department are pleased offer the first annual Ohio Farm Management Conference. The conference is designed to strengthen farm business owner’s employee management, financial decision making, long range planning, and communication skills. The event will be held on January 25th and 26th at the University Plaza Hotel in Columbus.

Dr. Brent Gloy, the Director of the Center for Commercial Agriculture and an Associate Director of the Center for Food and Agricultural Business at Purdue University, will be the keynote speaker. The program will feature numerous presentations from OSU Extension Educators, OSU Department of AEDE staff, and farmer experts.

A full description of the conference’s general sessions, breakout sessions, and registration information can be found at: http://ohioagmanager.osu.edu/2011-ohio-farm-management-conference/

If you have questions about the conference, contact John Yost at (740)335-1150 or e-mail him at yost.77@osu.edu.

Ohio Livestock Care Standards Board Proposes Civil Penalty Provisions

The Ohio Livestock Care Standards Board has proposed civil penalty provisions for violations of the livestock care standards currently under development by the Board.  The proposal addresses notification procedures for the Ohio Department of Agriculture (ODA), the agency responsible for enforcing the standards, and establishes two types of violations of the livestock care standards:  minor violations and major violations.

 A minor violation is one which violates the standards due to neglect or unintentional acts of substandard practices, but which does not place an animal’s life in imminent peril or cause protracted disfigurement, protracted impairment of health, or protracted loss or impairment of the function of a limb or bodily function.  For a minor violation, the ODA may fine the offender up to $500 for a first offense and up to $1,000 for a subsequent offense committed within 60 days of a previous offense. 

A major violation is one which does place an animal’s life in imminent peril or cause protracted disfigurement, protracted impairment of health, or protracted loss or impairment of the function of a limb or bodily function, or a violation that results in unjustifiable infliction of pain due to reckless or intentional acts.   The ODA may issue a penalty between $1,000 and $5,000 for a first major violation and between $5,000 and $10,000 for repeat violations committed within 60 days of a prior offense.    For major violations, the department may assist with the provision of care services for the animals and may assess the violator for the costs of providing proper care to the animals.

For both minor and major violations, the department may also seek recovery costs for investigations that result in penalties, including salary costs for employees directly involved in the investigation.  The rule also states that a violation affecting more than one animal may be considered one offense of the standards.

The Director of the Ohio Department of Agriculture has posted the proposed civil penalty provisions for public comment on ODA’s website.  The comment period runs until November 2.

North Central Region Sustainable Ag Research Grants Available

 The North Central Region Sustainable Agriculture Research and Education program is now accepting grant applications from farmers and ranchers interested in promoting sustainability on their farms.

Grants of $6,000 for individual farmers and $18,000 for groups of three or more are awarded to farmers and ranchers for initiating agricultural sustainability practices on their farm, protecting natural resources, enhancing communities, exploring innovative marketing, and boosting profitability.

Beginning farmers and youth may also apply. Projects should emphasize research or education/demonstration.

The deadline for proposals is Dec. 2.

The North Central Region SARE program began in 1992 and has funded more than 680 grants worth more than $4.3 million.

To learn more, log on to http://www.sare.org/NCRSARE/prod.htm, or contact Ohio’s SARE coordinators Mike Hogan at 330-627-4310 or hogan.1@osu.edu, or Alan Sundermeier at 419-354-9050 or sundermeier.5@osu.edu.

Farm Labor Contractors in Ohio

(Some aspects of the FLC are provided here, while more specific detail can be found through sources cited at the end of this article.)

Many Ohio producers employ migrant labor to help with their agricultural enterprise but they also have diversified operations with grain, beans, corn, dairy, livestock, farm markets and maybe even ag tourism. Time IS money, and a helping hand managing migrant labor can be a wise investment, given factors of Hispanic language, culture and social frameworks. Very often, this role is filled through a Farm Labor Contractor (FLC) or crew leader.

Role of the Contractor

The traditional view of a farm labor contractor revolves around their ability to obtain labor for an employer, and then manage that labor on site.  While the FLC helps identify, recruit and otherwise contract the necessary labor…and is therefore also referred to as recruiter, he (or she) may serve in other capacities.  Some FLCs may recruit labor but only provide transportation to the employer/job site.  Others may travel to Ohio apart from the labor but live amongst them in temporary labor housing during the season. An FLC may also supervise labor, keeping time/hours, directing the work assignments and serving as a go-between for the employer.  Often, they manage the physical housing facilities and deal with the daily social issues of the workforce.

 Two Farm Labor Contractor Examples

Contractor A is an older female, with past and present experience as a farmworker, joining her labor in the field work. Coordinating with the grower, she helps manage production to fill market orders while serving as field supervisor for the crew. A big part of the labor is single males, so, on lunch breaks, she serves as cook and crew leader, watching the time as well as the stew. After work, she may be counselor, social worker or transportation to run errands.  Significantly, she has been coming to Ohio for many years and has much experience with the programs and services directed at Hispanic labor. In fact, she has developed relationships with staff of many agencies, and she is a board member of a national health organization.

She observes that the best recruitment involves word-of-mouth job information, and she also cites good housing, good pay, and good agency services as factors.  The traditional way of recruiting through strong family/extended family bonds has somewhat given way to a workforce of singles with less committed relationships.  Some inexperienced workers need skills training to be productive, and a worker’s attitude also plays a part.

Contractor B is a male in his mid-20s who started by helping FLCs in transportation of workers.  Like Contractor A, he also serves as field supervisor, housing manager and monitor of labor social needs.  In recruitment, he also favors the referral of candidates by present labor, through their family and friends.  However, he also stresses the review of work history, the provision of work references, and consulting with other crew leaders who may have had contact with the worker seeking employment.

His situation differs from that of Contractor A, who works for only one grower and has asmaller crew, housed in one labor camp.  His grower has three separate housing facilities, and this FLC oversees the two closest to each other.  He also coordinates efforts with two other crew leaders because of the size and distance of the operations.  Also, Contractor A comes and goes with her labor as the crops go, but Contractor B remains as a general farm hand for a few more months, including the hauling of grain.  Then he goes south for the winter, returning in spring to help with planting and preparing the labor housing.

Some Context

The unrest and unknown in the immigration controversy is no secret. The Ft.Worth Star-Telegram recently reported :

“…since January 2009 more than 2,700 employers have been audited and $40 million in penalties assessed for immigration violations, more than during eight years under President George W. Bush…Napolitano told members of the National Conference of Editorial Writers that comprehensive immigration reform must include tougher employer sanctions as well as harsher penalties for immigration fraud and smuggling.”

Nationally, the Farm Bureau Federation has estimated that $5 billion to $9 billion worth of farm production would be lost in the short term if access to immigrant workers were cut off, and as much as one fifth of U.S. output in fruits, vegetables and nursery products would shift to other countries.

Unless something positive and workable is done for the ag industry, the role of the Farm Labor Contractor will remain as a crucial part of the whole.

*****

For some of the legal aspects of the farm labor contractor role, see the Dept. of Labor’s Wage & Hour Fact Sheet #49:  http://www.dol.gov/whd/regs/compliance/whdfs49.pdf  

For a broader overview of contractors, visit http://www.dol.gov/whd/mspa/index.htm

Is Planting Cover Crops Affecting My Crop Insurance Coverage?

There are many reasons that cover crops are planted in Ohio such as additional forage, nutrient recycling, soil erosion control, and improving soil tilth. In recent years the number of acres seeded to cover crops in Ohio has been increasing with the introduction of various legumes and barassica (oil seed radish, turnips, etc.) crops. With this renewed interest in cover crops, care needs to be taken not to inadvertently terminate crop insurance coverage.   

According to the Risk Management Agency (RMA) cover crops are considered a crop generally recognized by agricultural experts as agronomically sound for the area for erosion control or other purposes related to conservation or soil improvement. Depending on the stage of crop development, cover crops may make the intended insurable crop ineligible for crop insurance. Understanding the subtle interpretations of the RMA rules becomes important to securing crop insurance coverage.  This issue will be demonstrated through the following examples.

RMA rules do not permit crop insurance coverage for small grain crops planted for harvest that are inter-planted with another crop. This inter-planting rule specifically prohibits use of a grain drill or other tillage-based planting of the cover crop seed. Therefore, the only method available to establish a cover crop seeding in standing wheat, such as red clover, is through broadcasting the seed over the top of the wheat.  Once the wheat is harvested, mechanical seeding is acceptable.

For most crops, crop insurance policies state that any acreage following another crop that has reached the head (or bud) stage and/or that has been harvested in the same calendar year is not insurable. So cover crops seeded following wheat, soybeans or corn would not be insurable. What about seeding wheat, soybeans or corn after a cover crop?  The goal would be to make sure the cover crop does not reach the head or bud stage of growth development. Under this provision, farmers would need to destroy, either mechanically or chemically, the cover crop prior to the head or bud forming for the following crop to be insurable.  However, if the cover crop were harvested for forage instead of being destroyed, the following crop may or may not be insurable, depending on the insurance product purchased.

After harvesting a cover crop for forage farmers cannot plant and insure crops such as corn and soybeans with Yield Protection and Revenue Protection policies. However, farmers can use GRP and GRIP policies to insure these crops after harvesting cover crops. This article is not intended to answer all the questions concerning cover crops and crop insurance, but simply to increase farmer’s awareness of the potential issues. Farmers who want to plant cover crops to gain the benefits they provide, should check with their crop insurance provider prior to planting cover crops to make sure their farming practices do not result in a loss of insurance coverage due to a misunderstanding of the rules.

Ohio Dairy Web 2010

Are you a dairy producer?  Are you a member of the Ohio dairy industry?   If so you will be interested in learning about and bookmarking the website available at the Department of Agricultural, Environmental and Development Economics, College of Agricultural, Food and Environmental Sciences, The Ohio State University.  The link to this website is: http://aede.osu.edu/programs/ohiodairy/.

This website is maintained by Cameron Thraen, OSUE State Specialist, Dairy Markets and Policy.  On this website you will find current market data, charts and graphs of important dairy data, such as U.S. milk production, cow numbers and milk yields.  You can find a chart showing the net income margin for a typical Ohio dairy farm, such as Income over Feed, Net Income over Total Operating Cost, etc.  These charts are updated on a weekly or monthly basis to help you stay abreast of the markets.  There are many more links to useful information pertaining to the state of Ohio dairy.

Interested in the milk futures market?  A notable feature is a link to a current Class 3 milk futures price chart and table, updated daily.  The chart and table has that day’s closing futures price along with a table of premiums or discounts to the historical value for the Class 3 price.  Is a $14.50 January Class 3 futures price a good price?  Check out the futures premium or discount table and you will have your answer.

Along with current and historical market data and information, you will find valuable reading material on the current issues facing today’s dairy farm or industry participant.  There are links to market outlook letters from a wide array of dairy economists as well as links to the Mideast Federal Order website and comprehensive University of Wisconsin Dairy Markets website.

Fire-up your computer and take a visit to the Ohio Dairy Web 2010 site and make it one of your daily internet visits.

2010 Step Up in Basis

With the 2010 repeal of the federal estate tax, the rules for determining income tax basis on inherited property became more complicated for deaths occurring in 2010.  The income tax basis of a property is used for determining capital gains when an asset is sold and depreciation.  In prior years and in future years, the estate’s basis in the property is the fair market value at date of death, regardless of whether this is an increase or decrease in the decedent’s basis.

The basis of inherited assets in 2010 will be determined by a complicated process beginning at the lesser of the decedent’s basis in the property or the fair market value of the property on date of death.  Thus for some, the basis still may be decreased, particularly for stocks that have decreased in value.  For assets whose basis is still less than the fair market value, each estate of a U.S. citizen or resident has $1,300,000 of basis to add to the decedent’s existing basis. If property passes to a surviving spouse either outright or in a qualified terminable interest, the estate has another $3,000,000 of basis that the executor may allocate.  The additional basis amount is increased by capital loss and net operating loss carryovers of the decedent and certain calculated losses.  For non-resident aliens, the executor only has $60,000 of basis to allocate.   The executor may not increase the basis of any asset to more than the fair market value of the property at date of death.

For example, if a U.S. citizen or resident has a $2,000,000 estate with a $700,000 basis before death, the entire estate would receive a full step-up in basis.  If the pre-death basis was $200,000 and the assets do not pass to a spouse, there would not be a full basis step up.  The estate would have only $1,500,000 of basis.  The executor should be able to select the assets to which the executor allocates the basis.

The executor may not allocate basis to any property acquired by the decedent within three years of date of death if the property was acquired by gift or inter vivos transfer for less than full and adequate consideration, except for certain property that was received by gift from a spouse.   This expands the old rules in a couple of ways.  The old rules only applied to property acquired within one year of death and only if the property returned to the same person.

As under the old rules, the executor may not allocate basis to any property that falls within the definition of income in respect of a decedent, such as ordinary IRAs or other taxable retirement accounts.

The rules for 2010 can be a record keeping nightmare.  Many people do not know the current basis of their property, and their children or heirs may have an even harder time finding the appropriate records.   Executors may need to dig through several decades of records.

The IRS indicates on its website the following information.  Executors must file an information return if the property acquired from the decedent exceeds $1,300,000 or if the decedent acquired certain property by gift within three years of death. The information return is used to report the carryover basis of the decedent’s property and the allocation of the basis increase allowed under the new basis rules.

The new information return is due with the decedent’s final income tax return.  Generally, this means that for decedent’s dying in 2010, the due date is April 15, 2011. The IRS has not yet released the new form. Failure to file this information return may result in a penalty of $10,000.

In addition, executors must provide to each beneficiary a written statement that lists the information reported on the information return with respect to the property that the beneficiary acquired from the decedent. The executor must furnish the beneficiaries with this statement no later than 30 days after the filing of the estate information return. Failure to provide each beneficiary with this statement may result in a penalty of $50 for each failure.

However, it is important to note that a similar basis system enacted for decedents’ estates with dates of death after 1976 was postponed so that it did not apply to any dates of death before 1980 and then was retroactively repealed.  Accordingly, you will want to continue to monitor these rules as Congress addresses the estate tax system in the coming months… or years.

Major Crop Insurance Changes for 2011 Crop Year – Combo’s Product Released for 2011 Crop Insurance Year

 

After several years of planning, the Risk Management Agency will release the COMBO product for use in insuring crops for the 2011 cropping year. The first experience many producers will have with the Combo product will be when insuring wheat for 2011. The COMBO product is meant to simplify crop insurance choices, replacing many individual farm-level products with one product: the COMBO product. The release of the COMBO product does not impact county level plans such as Group Risk Plan (GRP) or Group Risk Income Plan (GRIP).

The COMBO product has three “plans” offering coverage previously contained in the Actual Production History (APH), Crop Revenue Coverage (CRC), Income Protection (IP), and Revenue Assurance (RA) products.

  • Yield Protection will make payments when yields fall below a yield guarantee. Yield Protection replaces the APH product.
  • Revenue Protection will make payments when revenue falls below a revenue guarantee. Under Revenue Protection, the guarantee can increase if the harvest price is above the projected price. Revenue Protection is similar to coverage offered under CRC and RA with the harvest price option.
  • Revenue Protection with the harvest price exclusion will make payments when revenue falls below a revenue guarantee. With the harvest price exclusion, the guarantee will not increase if the harvest price is above the projected price. Revenue Protection with the harvest price exclusion replaces IP and RA with the base price option.

For the complete article:

http://www.farmdoc.illinois.edu/manage/newsletters/fefo10_15/fefo10_15.html

Small Business Health Care Tax Credit – Farm Business Benefit

The new health reform law gives a tax credit to certain small employers (including farm business owners with employees) that provide health care coverage to their employees, effective with tax years beginning in 2010.

Small employers that provide health care coverage to their employees and that meet certain requirements (“qualified employers”) generally are eligible for a federal income tax credit for health insurance premiums they pay for certain employees. In order to be a qualified employer, (1) the employer must have fewer than 25 full-time equivalent employees (“FTEs”) for the tax year, (2) the average annual wages of its employees for the year must be less than $50,000 per FTE, and (3) the employer must pay the premiums under a “qualifying arrangement”.

The IRS has an informative website that answers the many different questions about this new provision of the Patient Protection and Affordable Care Act which was passed by Congress and was signed by President Obama on March 23, 2010.

The following webpage contains questions and answers that provide information on the credit as it applies for 2010-2013, including information on transition relief for 2010.

 http://www.irs.gov/newsroom/article/0,,id=220839,00.html