Pay Limit Issues Surface Relative to ERP Program

Seed variety issues ahead?

Policy Updates
Policy Updates
(Farm Journal)

Seed variety issues ahead?

In Today’s Digital Newspaper

Today’s dispatch is abbreviated due to early travel to Idaho for a meeting of the Cotton Warehouse Association of America. I’ve done this meeting many years now and look forward to reconnecting with so many industry friends.


— Ukraine’s President Volodymyr Zelenskyy said this coming winter will be “the most difficult” for Ukraine since its independence from the Soviet Union and has said the country won’t sell gas and coal abroad. Meanwhile, there has been a report suggesting that more than 1,000 Ukrainian fighters captured in Mariupol have been sent to Russia for an “investigation.” Brutal street fighting continues in Ukraine’s east, notably in the cities of Severodonetsk and Lysychansk, where Ukrainian forces have managed to regain some territory from Russian forces. Russia still holds the majority of Luhansk, however, as it pushes on in its goal to control the entire eastern Donbas region. More than 40,000 Ukrainians have been killed or wounded during the war, an official said. Exiled leaders warned that Russian-occupied Mariupol is at risk for disease outbreaks as dead bodies remain in the streets there.

— Russian Foreign Minister Sergei Lavrov is in Ankara today for talks following reports Turkey is close to brokering a deal to restart exports of Ukrainian grain through the Black Sea. The country’s grain and oil storage facilities that haven’t been destroyed are now full.

— Italy’s foreign ministry is hosting a food security crisis conference with the U.N.’s Food and Agriculture Organization and co-chaired by Germany, Lebanon and Turkey. The discussion comes ahead of a G7 confab later this month G7 countries where officials will outline global initiatives to help prevent hunger as Russia weighs on grain importers.

— Angela Merkel warned that isolating Russia isn’t possible long term even if President Vladimir Putin made a “big mistake” by invading Ukraine. The remarks — in an on-stage interview at a theater in central Berlin — marked the former German chancellor’s return to the public arena. Merkel also said she had “at no time given in to illusions” that Germany’s Change through Trade policy would really alter Putin’s behavior. “I was not naive,” Merkel insisted, arguing that she repeatedly warned that Putin “wants to destroy the EU because he sees it as a precursor to NATO.” She added: “Diplomacy isn’t wrong just because it doesn’t succeed. “So I don’t see why I should say that was wrong, and I won’t apologize for it.” Her interview took place in front of a packed audience in the Berliner Ensemble theatre with Alexander Osang, a reporter with news magazine Der Spiegel. She said of the war: “Looking back, I’m glad that I can’t accuse myself of trying too little to prevent such an event from happening.”

— Europe has overtaken Asia as the biggest destination for U.S. liquefied natural gas as the region seeks to slash its dependence on Russian supplies. The U.S. sent nearly three-quarters of its liquefied natural gas to Europe in the first four months of 2022, with daily shipments to the region more than tripling from last year’s average, the U.S. Energy Information Administration said.

— Europe is at risk of winter energy rationing, said IEA chief Fatih Birol, adding that improving efficiency is vital to curb gas demand as Ukraine crisis continues.

— Global growth will be throttled amid inflation, war, supply chain chokeholds, Covid-related lockdowns in China and surging increases in energy and food prices, according to the World Bank. World growth is expected to slow to 2.9% this year from 5.7% in 2021. In the most advanced economies like the U.S. and Europe, growth is forecast to slow to 2.5% this year. China is projected to see growth drop to 4.3% from 8.1% in 2021. The assessment noted that the poorest nations will grow poorer, hungrier and less secure. Roughly 75 million more people will face extreme poverty than were expected to before the pandemic.

— San Francisco voters have recalled Dist. Atty. Chesa Boudin a year-and-a-half before his term as the city’s top prosecutor ends after an expensive campaign. Boudin, elected in 2019 as part of the nationwide movement to reimagine public safety and redefine the role of a prosecutor, lost traction among votes that has grown increasingly concerned about visible crime and homelessness.

— Seed availability issues surface. On a recent Signal to Noise podcast, a viewer/listener asked about the availability of some seed due to drought and other conditions. We received mixed information when checking out the topic. A seed company contact said: “Seed companies are in the business to sell seed. They are not going to run short and will produce to compensate for the risk around weather etc. Some varieties could be short in a given year if or when it hurts that particular production geography.” Meanwhile, Michelle Jones, a producer, emailed: “Our local Nutrien dealer has told us if we want 2023 Clearfield winter wheat seed that we need to buy it now — and they’re not sure they can find it. It’s apparently very short. That’s not wildly surprising given the WW production challenges —and wheat doesn’t import as much seed from other locations (that I know of) like corn and soybeans. But I’ve never had that happen — especially on established varieties; sometimes new releases can be short this far in advance.”

— A farm policy issue has surfaced relative to the Emergency Relief Program (ERP). There are several payment limit issues. For equipment gains to be considered part of a farm AGI, other net farm AGI must be greater than 66.66% of overall AGI. However, the Tax Cuts and Jobs Act of 2017 (TCIA) made all trades of farm equipment a taxable event which causes the gain to be recognized as taxable income, and the equipment purchased is allowed to be fully deducted using 100% bonus deprecation. This causes many farmers’ tax returns to show negative Schedule F income while having overall net farm income if equipment gains were included. But it appears the FSA handbook has not been updated to address this issue. Many farmers have 100% of their income from farming, but they show an overall AGI loss. In this case, the farmer can never qualify for the increased payment limit. Meanwhile, most married farmers file joint income tax returns. Under the rules for determining AGI for the more than $900,000 AGI limits for most farm programs, CPAs and attorneys are allowed to determine what the farmer’s AGI would be if they filed a married filing separate tax return. Clarity is needed if CPAs and attorneys can do the same for the more than 75% of farm AGI calculation. Without this ability, many farmers will not be able to receive an increased payment due to their spouse’s income exceeding 25% of AGI. One suggestion being offered: Farmers with negative farm AGI should be allowed to receive the increased payment limit as long as their gross receipts from farming exceeds some percentage of overall gross receipts. Says one CPA: “They may want to bump this number to greater than 75% such as 85% or more, but these farmers should not be penalized due solely to overall losses during these years. These farmers are likely the ones that need the relief the most.”

— Court orders full EIS for Calif. offshore fracking permits. The U.S. Court of Appeals for the Ninth Circuit ruled Friday that the Interior Department must conduct more extensive environmental impact reviews before authorizing the use of advanced well stimulation techniques such as hydraulic fracturing and acidization for drilling off California’s coast. According to the ruling, federal agencies issued permits without first completing a full environmental impact statement as required by the National Environmental Policy Act.