Biomass Crop Assistance Program (BCAP) Signup Begins in Ohio

By David Marrison, OSU Extension Educator

On June 15, 2011 the USDA announced the establishment of four additional Biomass Crop Assistance Program (BCAP) project areas to promote the cultivation of giant miscanthus that can be converted into energy to be used for heat, power, liquid biofuels, and bio-based products. One of the areas accepted was been Ashtabula County in Northeast, Ohio and targets 2011 enrollment of 5,344 acres in Ashtabula, Geauga, Lake, and Trumbull, Ohio, and Crawford, Erie, and Mercer counties, Pennsylvania. The sponsor for this project is Aloterra Energy, LLC and the project area surrounds the company’s biomass conversion facility in Ashtabula, Ohio.

Selected producers are eligible for reimbursements of up to 75 percent of the cost of establishing a perennial bioenergy crop. They can receive up to five years of annual payments for planting miscanthus. Assistance for the collection, harvest, storage and transportation of crops to facilities will be also available for two years, per producer, in the form of a matching payment for up to $45 per ton of the delivery cost.

BCAP was authorized in the 2008 Farm Bill, is a primary component of the strategy to reduce U.S. reliance on foreign oil, improve domestic energy security, reduce pollution and spur rural economic development and job creation. The sign-up period to receive BCAP money began on Monday, June 20, 2011. Click here to read the complete information on the BCAP Program.The Farm Service Agency (FSA) will be administering the program with conservation planning assistance from the Natural Resources Conservation Service (NRCS). Producers interested in participating in the project areas should visit their local FSA county office (check out http://www.fsa.usda.gov/bcap.

Ohio Estate Tax Repealed

By: Peggy Kirk Hall

The Ohio legislature has approved a repeal of the Ohio estate tax, but the tax will remain in effect for another 18 months. The new law removes the Ohio estate tax obligation for any person who dies on or after January 1, 2013. Governor Kasich signed the provision into law on June 30, 2011 as part of the state’s budget package. The final version of the repeal differed from the language proposed earlier this year in H.B. 3, which proposed ending the estate tax as of January 1, 2011 (click here to view earlier post).

“Transferring Your Farm Business Workshop to be held in Northeast Ohio”

By: David L. Marrison, Ag & NR Extension Educator

Click here for the registration flyer

As the age of farm operators increases, transferring the ownership and management of the family farm will become one of the most important issues farm families will face. This workshop has been designed to help farm families in Northeast Ohio plan for the transfer of their family farm. To help farm families plan for the future, OSU Extension will be hosting a Transferring Your Farm Business workshop on August 23, 2011 from 9:00 a.m. to 4:30 p.m. at the OSU Extension Office in Trumbull County located at 520 West Main Street in Cortland.

This workshop will challenge you to actively plan for the future. Farm families are encouraged to bring members from each generation to this workshop. Kick off your estate planning discussion with the tools offered at this workshop. Learn from the estate transfer nightmares encountered by other farm families. This workshop is one which will help you develop a plan for the future, discover ways to increase family communication, and learn strategies for transferring management skills and the farm’s assets from one generation to the next.

Some of the topics which will be addressed include: Getting the Family to Talk About Estate Planning, Getting Your Affairs in Order, How to Use Farm Business Arrangements in Estate Planning, Estate and Transfer Strategies, Providing Income for Multiple Generations, How Do I Treat Each Offspring Fairly When It Comes to Dividing up our Farm, and Long-Term Care Issues.

The workshop teaching team will include: David Marrison, OSU Extension Educator in Ashtabula & Trumbull Counties, Dr. Chris Bruynis, OSU Extension Educator in Wyandot County; Dr. Jim Skeeles, OSU Extension Educator in Fairfield County, and Paul Wright & Robert Moore, Attorneys-Wright Law Company. Registration will begin at 8:30 a.m.

Registration fee is $50 for the first family member. This fee includes morning refreshments, lunch, program handouts and a great family resource notebook. Additional family members are encouraged to attend for $15 per person (includes refreshments, lunch, and program handouts). Pre-registration is required by August 15 and registrations are limited to the first 60 attendees. Make checks payable to OSU Extension and mail to OSU Extension, 520 West Main Street, Suite 1, Cortland, Ohio 44410. If you have any questions please call 330-638-6783 or email David Marrison at marrison.2@osu.edu This workshop is being sponsored by the OSU Extension offices in Ashtabula, Cuyahoga, Geauga, Lake, Lorain, Medina, Portage, Summit, & Trumbull counties.

Eliminating Direct Payments and Potential Impacts of Extending Ethanol Tax Credit

by Chris Bruynis, Extension Educator

The University of Missouri recently released two articles that are of interest to farmers. The first examines the effect on the agriculture economy if direct payments would be eliminated from the next Farm Bill while the second examines the potential impacts of extending the ethanol tax credit.

Eliminating direct payments is expected to increase the participation in ACRE or similar options in the next Farm Bill, have no effect on acres planted by crop, and reduce land values slightly. For more information go to Potential Impacts of Eliminating Direct Payments.

The ethanol tax credit article can be found at FAPRI U.S. Biofuel Baseline and impact of extending the $0.45 ethanol blenders credit. Although this article looks at the benefit and probable outcomes of extending the credit, the reader can infer what the probable outcome may be now that the tax credit has been voted out by the Senate.

Ohio estate tax will disappear in 2013

The Ohio legislature has approved a repeal of the Ohio estate tax, but the tax will remain in effect for another 18 months.  The new law removes the Ohio estate tax obligation for any person who dies on or after January 1, 2013.  Governor Kasich signed the provision into law on June 30, 2011 as part of the state’s budget package.  The final version of the repeal differed from the language proposed earlier this year in H.B. 3, which proposed ending the estate tax as of January 1, 2011 (see our earlier post).

How Well Do Farmers Tolerate Risk? Part 2 – Comparisons to Non-farm Business Owners

Brian Roe
Department of Agricultural, Environmental and Development Economics

Last month I asked a simple question: does farmers’ constant exposure to risk and risky decisions make them better able to tolerate risk than other people? Or has it gone the other way and made farmers more likely to want to avoid future risks? Using surveys to get a representative sample of the general population and the population of farmers, I asked a simple question to assess a person’s willingness to take risks on a 1 to 11 scale, where higher numbers means more willingness to take risk. Click here to read the entire article.

Legislature agrees on changes to Ohio Livestock Environmental Permitting Program

Bill establishes time limits for township and county infrastructure review

A bill approved by the Ohio General Assembly proposes limiting the amount of time county and township officials have for recommending local infrastructure needs for the operation or expansion of a Concentrated Animal Feeding Facility (CAFF).  Both the House and Senate have approved H.B. 22, sponsored by Rep. Buchy (R-77).  The bill now awaits action by Governor Kasich.

Recently introduced on May 17, 2011, H.B. 22 proposes a 75 day time limit for county commissioners and township trustees to provide final recommendations for improvements to local infrastructure that are needed to accomodate a CAFF.   Notification by the CAFF to the county and township is a required step in the Livestock Environmental Permitting Program (LEPP) permit application process.  Information on anticipated traffic routes and number and weights of vehicles must accompany the notification.  Under current law, the county and township must next provide initial recomendations to the CAFF for needed infrastructure improvements.  The CAFF may accept the recommendations or may propose an alternative, and the county and township must then render written final recommendations for infrastructure improvements.  The CAFF must submit the county and township’s final recommendations in its LEPP permit application.

Under the language agreed to by the legislature in H.B. 22, if the county or township fails to provide the written final recommendations in 75 days, the CAFF may proceed with the permit application by submiting an affidavit in lieu of the written final recommendations.  The affidavit must state that the CAFF provided the required notification but did not receive written final recommendations from the county or township within 75 days of giving the notification.

The legislature’s approval of H.B. 22 comes in the wake of a controversial denial of a LEPP permit application by Hi-Q for an egg laying facility in Union County.  ODA Director Zehringer denied Hi-Q’s application because it did not contain the required final infrastructure recommendations from county and township officials.  Hi-Q and Union County had reached an impasse on infrastructure issues, and Hi-Q submitted the permit without any final recommendations by the county.  (See our earlier post on the Director’s decision.)  Under H.B. 22′s language, Hi-Q could have submitted an affidavit instead of the written final recommendations because more than 75 days had passed since Hi-Q’s original notification to the county and township.    The Director thus would not have had to deny the permit application for lack of county and township written final recommendations for infrastructure improvements.

H.B. 22 also proposes changing LEPP from a program to a Division of Livestock Environmental Permitting, and contains a number of other revisions to ODA programs and regulations.  See the analysis of H.B. 22 on the Ohio Legislature’s website.

Ohio Legislature revises law for livestock running loose

New law establishes clear standards for liability, adds alpacas, llamas and bison

Livestock owners and keepers in Ohio will soon have less risk of automatic liability when their animals escape enclosures and run loose on public roadways or the property of others.   The Ohio legislature has revised the “animals running at large” law to clarify two different standards for criminal and civil liability under the law.  

Criminal liability will occur only when proven that a livestock operator behaved “recklessly” in allowing the animals to run loose.  Under Ohio law, a person behaves recklessly when he or she perversely disregards a known risk of his or her conduct, with heedless indifference to the consequences of that conduct.   For example, a livestock owner who sees but intentionally ignores a downed fence where cattle graze near a roadway could be deemed “reckless.”  

The new law establishes a different standard of liability for a civil situation.  A person may recover damages against a livestock owner if harm resulted because the livestock owner’s “negligence” caused the animals to escape.  Under Ohio law, negligence is a substantial lapse of “due care” that results in a failure to perceive or avoid a risk.  For example, a livestock owner who has not checked the line fences in a grazing area for several years could be deemed “negligent.”

Additionally, the revised law states that an animal being at large creates an initial presumption of negligence by the owner.  The animal owner must then rebut the presumption by proving that he or she exercised due care.

The revised law should address a growing problem in Ohio, where livestock owners have been held automatically liable when their animals are found running at large–regardless of  the reason for the animals’ escape or any actions taken or not taken by the owner.  This problem has occurred most frequently with criminal prosecutions.  Owners of escaped animals have been assessed automatic criminal penalties, without having an opportunity to explain their management practices or present facts about the animals’ escape.  The new law remedies this problem by clarifying that criminal liability is not “automatic” simply because livestock are loose; there must be proof that the owner was reckless.

In addition to addressing the standards for liability, the revised animals at large law also:

  • Adds llamas, alpacas and bison to the list of animals addressed in the liability provisions, which already included horses, mules, cattle, sheep, goats, swine and geese.
  • Also adds llamas, alpacas and bison to the law’s provisions for taking, confinement and care of animals running at large.
  • Removes a separate liability provision for male breeding animals; male breeding animals will now fall under the same liability section of the law as other animals.
  • Revises a similar civil liability provision for livestock in Ohio’s line fence law to clarify that negligence is the requisite standard of liability under that law.

The governor signed H.B. 22 on June 21, 2011; the law takes effect on September 20, 2011.  View H.B. 22 here.

IRS Increases Mileage Rate to 55.5 Cents per Mile

WASHINGTON — The Internal Revenue Service today announced an increase in the optional standard mileage rates for the final six months of 2011. Taxpayers may use the optional standard rates to calculate the deductible costs of operating an automobile for business and other purposes.

The rate will increase to 55.5 cents a mile for all business miles driven from July 1, 2011, through Dec. 31, 2011. This is an increase of 4.5 cents from the 51 cent rate in effect for the first six months of 2011, as set forth in Revenue Procedure 2010-51.

In recognition of recent gasoline price increases, the IRS made this special adjustment for the final months of 2011. The IRS normally updates the mileage rates once a year in the fall for the next calendar year.

“This year’s increased gas prices are having a major impact on individual Americans. The IRS is adjusting the standard mileage rates to better reflect the recent increase in gas prices,” said IRS Commissioner Doug Shulman. “We are taking this step so the reimbursement rate will be fair to taxpayers.”

While gasoline is a significant factor in the mileage figure, other items enter into the calculation of mileage rates, such as depreciation and insurance and other fixed and variable costs.

The optional business standard mileage rate is used to compute the deductible costs of operating an automobile for business use in lieu of tracking actual costs. This rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage.

The new six-month rate for computing deductible medical or moving expenses will also increase by 4.5 cents to 23.5 cents a mile, up from 19 cents for the first six months of 2011. The rate for providing services for charitable organizations is set by statute, not the IRS, and remains at 14 cents a mile.

The new rates are contained in Announcement 2011-40 on the optional standard mileage rates. Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Mileage Rate Changes effective July 1, 2011:
Business- from $0.51 to $0.555
Medical/Moving- from $0.19 to $0.235
Charitable- stays at $0.14

Article courtesy of Internal Revenue Service

GIPSA Hog Contract Requirements

by Robert Moore, Attorney-Wright Law Co. LPA
Dublin, Ohio

The 2008 Farm Bill contained specific provisions that must be included in all hog production contracts. The Grain Inspection, Packers, and Stockyards Administration (GIPSA) defines hog production contracts as “any growout contract or arrangement under which a person or business raises and cares for swine according to the instructions of another person”. In essence, anyone raising, feeding, or growing hogs for another person or business is subject to these provisions.

Four specific provisions must be included in all hog production contracts executed after June 18, 2008. The provisions are as follows:
1. The Grower may cancel the contract within three days after signing or within some other agreed to period. The method of notice and deadline for cancellation must be specifically provided.
2. Include a disclosure statement on the first page that clearly states that additional large capital investments may be required of the grower during the term of the contract.
3. Allow growers to opt out of arbitration provisions before entering a contract.
4. The venue for a contractual dispute shall be the federal judicial district in which the contract was performed and the choice of law shall be governed by the state in which the dispute arose (unless otherwise prohibited by the law of the state in which the contract was being performed).

Contracts that were executed after June 18, 2008 but do not contain the above provisions must be cancelled and re-executed with the required provisions. Amending the contract will likely not meet the requirements of GIPSA because the capital improvement disclosure statement must be on the front page of the contract. An amendment containing the disclosure statement would likely not be considered to be on the front page of the contract even if physically attached to the front of the contract.

The penalty for not complying with the GIPSA regulations is a fine up to $11,000 per violation. While hog contractors may not like or agree with these rules, it is nonetheless a relatively easy issue to resolve by adding the four provisions to the contractor’s standard contract.