Nebraska Department of Agriculture
Beginning Farmer Program
Annual Report
A Message From the Board President
It has been my privilege to serve as Chair of the Beginning Farmer Board this past fiscal year.
My responsibilities were simplified and made more enjoyable because of very involved Board
members and excellent support from staff members of the Nebraska Department of Agriculture.
Our Board met four times in the past year. The highlight of our year was certifying the eligibility of the agricultural asset owners and the beginning farmers.
We have had several interesting discussions at Board meetings regarding the future of agriculture and, particularly, the future of beginning farmers. Other representatives of state government and various agricultural programs have participated in the discussion with our Board. Our Board and staff are very excited about the accomplishments of our program. However, many concerns remain regarding the future of agriculture and the success rate of beginning farmers.
Sincerely,
Dale E. Pohlmann, Chairman
Beginning Farmer Board of Directors
Nebraska History has been made! The first Beginning Farmer Tax Credits were issued for the 2001 Nebraska income tax! The farmers who have received the tax credits will share their strengths with the beginning farmers and, together, will build a future for both.
The Board of Directors have been very involved in the application process and in getting the word out about the program and what it has to offer. They know what it means to a rural community to have younger people work and live in the community. Not only is it one answer to the big question of who will provide our food in the future, but it will also help to keep the rural communities strong and viable.
The amount of press the Beginning Farmer Program has received has been wonderful and has helped people become aware of what can be done to reverse the national trend of farmers working long past retirement years with no plans to transfer or teach their skills to someone younger. We don't want to lose their expertise. They are a valuable resource for our beginning farmers, and it is important that they pass on their knowledge to the next generation of farmers.
We have joined with several other beginning farmer programs to form the Beginning Farmer Task Force to coordinate and enhance the programs for the benefit of all Nebraska farmers. They will develop a "virtual" Beginning Farmer Center in Nebraska, which will have a toll free number which can be transferred to the various programs across the state, and a web site to share events and programs, with links back to our individual programs. It is exciting to be part of a group of people who are committed to the success of Nebraska agriculture!
| Name | Category | Contact Information | Term |
|---|---|---|---|
| Merlyn Carlson | Director, Nebraska Department of Agriculture |
P.O. Box 94947 Lincoln, NE 68509 (402) 471-2341 |
|
| Greg Ibach Designee |
Deputy Director, Nebraska Department of Agriculture |
P.O. Box 94947 Lincoln, NE 68509 (800) 831-0550 |
|
| Mary Jane Egr | Tax Commissioner, Nebraska Department of Revenue |
P.O. Box 94818 Lincoln, NE 68509 (402) 471-5604 |
|
| Dave Dearmont Designee |
Research Division, Nebraska Department of Revenue |
P.O. Box 94818 Lincoln, NE (402) 471-5604 |
|
| Roy Frederick | Academic Community UNL-Professor, Agricultural Economics |
UN-L East Campus 207 B Filley Hall Lincoln, NE 68583 (402) 472-6225 |
7/16/03 |
| Harry Knobbe | Producer, District 1 Vice President |
596 -15th Road West Point, NE 68788 (402) 372-3073 |
7/16/03 |
| Dale Pohlmann | Agricultural Lender, President |
P.O. Box 40 Ravenna, NE 68869 (308) 452-3225 |
7/16/03 |
| Timothy Schram | Producer, District 2 | 14602 S 234th Street Gretna, NE 68028 (402) 332-3625 |
7/16/03 |
| Bill Zutavern | Producer, District 3 | P.O. Box 158 Dunning, NE (308) 538-2244 |
7/16/03 |
Marian Beethe, Administrator
Beginning Farmer Program
P.O. Box 94947
Lincoln, Nebraska 68509-4947
Phone: (402) 471-6890
Web site: www.agr.state.ne.us
Joanne Komenda, Coordinator
Beginning Farmer Program
P.O. Box 94947
Lincoln, Nebraska 68509-4947
Phone: 800-446-4071
| Meeting Date | Members Attending | Guests | Staff |
| August 22, 2001 | Dave Dearmont Roy Frederick Greg Ibach Harry Knobbe Dale Pohlmann Tim Schram Bill Zutavern |
Craig Breunig, Legislative Aide (Senator Jim Jones, District 43) Senator Doug Cunningham, District 18 Kim Davis, Legislative Aide (Senator Doug Cunningham, District 18) Grace Honeywell, Legislative Aide (Senator George Coordsen, District 32) Rick Leonard, Legislative Aide (Senator Merton "Cap" Dierks, District 40) Mark Ludwig, Legislative Aide (Senator Ed Schrock, District 38) Tania Stewart, Legislative Aide (Senator Roger Wehrbein, District 2) Senator Roger Wehrbein, District 2 Dave Goeller-UNL, Beginning Farmer Joy Johnson, Center for Rural Affairs Michael Holton, Center for RuralAffairs |
Marian Beethe Joanne Komenda |
| November 29, 2001 | Dave Dearmont Roy Frederick Greg Ibach Dale Pohlmann |
Dave Goeller-UNL, Beginning Farmer Joy Johnson, Center for Rural Affairs Tania Stewart, Legislative Aide (Sen. Roger Wehrbein, District 2) Mark Wilke, Farm Service Agency |
Marian Beethe Joanne Komenda |
| January 9, 2002 | Merlyn Carlson Dave Dearmont Roy Frederick Greg Ibach Dale Pohlmann Tim Schram Bill Zutavern |
Jon Bailey, Center for Rural Affairs Tania Stewart, Legislative Aide (Senator Roger Wehrbein, District 2) |
Marian Beethe Joanne Komenda |
| April 10, 2002 | Dave Dearmont Roy Frederick Greg Ibach Harry Knobbe Dale Pohlmann |
Dudley Beyer, NIFA Tania Stewart, Legislative Aide (Senator Roger Wehrbein, District 2) Steve Henry, Asset Owner Applicant |
Marian Beethe Joanne Komenda |
"The Beginning Farm Tax Credit Act has made steady progress since its initiation. Most programs of this type require a period of familiarization to help the public understand how it is applicable to them. This law has been no exception. Yet the volume of inquiries and applications continues to grow exponentially. This bodes well for the program's future.
Program staff in the Nebraska Department of Agriculture deserve much credit for publicizing the availability of the act to operators and landowners across the state. I believe we are now at a point where word-of-mouth publicity also will be helpful. Success stories by participants ultimately will be the program's greatest promoter.
At some point, the Legislature may wish to revisit eligibility requirements and benefits offered by
the program. Perhaps changes are neither needed nor desirable. On the other hand, participation
levels might be enhanced by modifying eligibility standards or increasing benefits."
Roy Frederick, Board Member
"I am enclosing a copy of the rental agreement Ryan and I have on the last 200 acres we have
rented to him. We are very pleased with Ryan as a tenant, neighbor, and friend. We appreciate
the effort he has done to make our Nebraska Income Tax Credit possible, as well as what you
have done for us."
Martin Schmidt, Tax Credit Recipient
"I have been very pleased with the number of young applicants and with the progress of the program. I am also pleased that there has been an increased use of the tax credit as an incentive to rent to a beginning farmer.
I hope to continue the expansion of the program."
Roger Wehrbein, Nebraska State Senator
"First of all, I feel the program is working very well, but I don't know if we have reached enough young farmers. I'm not sure how many of them are even aware of this program.
Secondly, I feel we need to change the $100,000 level of net worth to $150,000 to involve more
young farmers. In the agriculture business, if you want them to be successful, I feel we need to
be at that level."
Harry Knobbe, Board Member
"The Beginning Farmer Program is a start in the right direction. It can grow from where it's at to help more beginning farmers.
We may need to make some changes to have more people eligible. I don't think the requirement
of less than $100,000 net worth is high enough. It limits too many young people."
Bill Zutavern, Board Member
| Account Code Description | Budgeted Amouth | Year-To-Date | % of Budget | Variance-Favorable (Unfavorable) |
| 4100 Personal Services | ||||
| 4111 Permanent Salaries-Wages | $30,924.00 | $25,819.42 | 83.49 | $ 5,104.58 |
| 4121 Vacation Leave Expense | 0.00 | 2,952.31 | ( 2,952.31) | |
| 4122 Sick Leave Expense | 0.00 | 742.29 | ( 742.29) | |
| 4123 Holiday Leave Expense | 0.00 | 1,426.55 | ( 1,426.55) | |
| 4125 Funeral Leave Expense | 0.00 | 40.43 | ( 40.43) | Personal Services Subtotal | $30,924.00 | $30,981.00 | 100.18 | ($ 57.00) |
| 4131 Retirement Plans Expense | 2,179.00 | 2,059.99 | 94.54 | 119.01 |
| 4132 OASDI Expense | 2,365.00 | 2,214.44 | 93.63 | 150.56 |
| 4134 Life & Accident Ins. Exp. | 46.00 | 22.80 | 49.57 | 23.20 |
| 4135 Health Ins. Exp. | 6,550.00 | 6,196.02 | 94.60 | 353.98 |
| 4144Employee Assistance Prog. | 14.00 | 13.90 | 99.29 | .10 |
| Major Account 4100 Total | $42,078.00 | $41,488.15 | 98.60 | $ 589.85 |
| 4200 Operating Expenses | ||||
| 4211 Postage Expense | 225.00 | 274.07 | 121.81 | ( 49.07) |
| 4212 Communication Expense | 550.00 | 428.81 | 77.97 | 121.19 |
| 4214 Data Processing Expense | 4,198.88 | 3,694.75 | 87.99 | 504.13 |
| 4215 Publication and Print Exp. | 1,000.00 | 1,314.92 | 131.49 | ( 314.92) |
| 4221 Dues & Subscription Exp. | 50.00 | 45.00 | 90.00 | 5.00 |
| 4222 Conference Registration Fee | 200.00 | 225.00 | 112.50 | ( 25.00) |
| 4244 Exhibit Space | 0.00 | 115.00 | 0.00 | ( 115.00) |
| 4311 Office Supplies Expense | 50.00 | 140.85 | 281.70 | ( 90.85) | 4312 Non-Capitalized Equipment | 1,069.71 | 1,069.71 | 100.00 | ( 0.00) |
| 4415 Acctg & Auditing Services | 62.00 | 61.52 | 99.23 | .48 |
| 4483 Worker Comp Premiums | 589.00 | 588.94 | 99.99 | .06 |
| Major Account 4200 Total | $ 7,994.59 | $ 7,958.57 | 99.55 | $ 36.02 |
| 4700 Travel Expense | ||||
| 4711 Board & Lodging | 300.00 | 790.13 | 263.38 | ( 490.13) |
| 4716 Meals - Not Travel Status | 150.00 | 275.94 | 183.96 | ( 125.94) |
| 4719 Meals - One Day Travel | 225.00 | 0.00 | 0.00 | 225.00 |
| 4721 Commercial Transportation | 0.00 | 334.54 | ( 334.54) | |
| 4741 Personal Vehicle Mileage | 1,200.00 | 1,418.42 | 118.20 | ( 218.42) |
| 4751 Misc Travel Expense | 50.00 | 60.00 | 120.00 | ( 10.00) |
| Major Account 4700 Total | $ 1,925.00 | $ 2,879.03 | 149.56 | ($ 954.03) |
| 4800 Capital Outlay | ||||
| 4841 Office Equipment | 202.35 | 202.35 | 100.00 | 0.00 |
| Major Account 4800 Total | $ 202.35 | $ 202.35 | 100.00 | $ 0.00 |
| Total Budget/Program | ||||
| Expenditures | $52,199.94 | $52,528.10 | 100.63 | ($ 328.16) |
The number of inquiries about the Beginning Farmer Program has almost doubled this year, but we still have a long way to go! Referrals continue to come from many sources, especially from the stories and information published by the press and the Nebraska Department of Revenue. Thirty-two percent of the referrals came from news articles and the Nebraska Department of Revenue's tax forms, newsletter, and tax seminars.
The statistics are reported for both the governmental fiscal year and the Department of Revenue's tax year. The number of applications and the eligibility of the beginning farmers are kept according to the fiscal year in which they were received and determined eligible. Since the tax credits are paid according to the Department of Revenue's income tax year, the dollar amount of the tax credit is recorded according to the tax year. The number of beginning farmers who paid the rent and owners of agricultural assets who received the tax credits are also recorded according to the tax year to give a true picture of the average amount of rent paid and tax credits received.
Completed application packets (cases) have been received from 20 beginning farmers and owners of agricultural assets during the fiscal year 2002 (July 1, 2001 - June 30, 2002). During fiscal year 2002, 14 beginning farmers and 16 owners of agricultural assets have been declared eligible. They represent 18 eligible cases. Two cases were declared ineligible and five cases are pending approval.
For the 2001 tax year, 14 owners of agricultural assets received $26,586.51 Nebraska Income Tax Credits.
A projection of the tax credits for the tax year 2002 has been listed for the applications that have been declared eligible thus far. Additional applications signed and dated before the end of the owner's tax year may still be accepted to increase these amounts.
| Fiscal Year Participation | July 1, 2000 - June 30, 2001 |
July 1, 2001 - June 30, 2002 |
Totals |
| Number of Cases (Application Packets from Beginning Farmers and Asset Owners) See #1 below. |
5 | 20 | 25 |
| Number of Beginning Farmers Declared Eligible. See #2 below. | 2 | 14* | 16* |
| Number of Asset Owners Declared Eligible. See #3 below. | 2 | 16* | 18* |
| Number of Cases Declared Eligible. | 2 | 16 | 18 |
| Number of Cases Declared Ineligible. | 0 | 2 | 2 |
| Number of Cases Pending. | 4 | 5 | XXX |
l. Cases - An application packet that has been sent in with applications completed by the owner of agricultural assets and the beginning farmer who have signed a rental agreement for three years that qualifies for the tax credit.
2. Beginning Farmers - Each individual who is qualified as a beginning farmer is counted once. A beginning farmer may have more than one contract with one or more asset owners, but will still be counted only once.
3. Agricultural Asset Owner - Each individual, partnership, or corporation who is qualified as an asset owner is counted once. An asset owner may have more than one contract with one or more beginning farmers, but will still be counted only once.
*An agricultural owner may rent to more than one beginning farmer and a beginning farmer may rent from more than one agricultural owner. Therefore, the number of owners and beginning farmers may not be the same.
| Participation Per Tax Year | Tax Year 2001 Amount Paid |
Tax Year 2002+ Contracted to Date |
||||||
| Total Tax Credits Received by Owners | $ 26,586.51 | $ 41,917.11 | ||||||
| Total Rent Paid by Beginning Farmers | $531,730.03 | $838,341.98 | ||||||
| Average Tax Credit Received by Owner | $ 1,899.04 | $ 1,905.32 | ||||||
| Average Rent Paid by Beginning Farmer | $ 40,902.31 | $ 39,921.05 | ||||||
| Number of Owners Receiving Tax Credits. See # 1 below. | 14* | 22*
| Number of Beginning Farmers Paying Rent. See # 2 below. |
13* |
21* |
Number of Cases Per Tax Year. See #3 below. |
12 |
23 |
|
1. Agricultural Asset Owner - Each individual, partnership or corporation who is qualified as an asset owner is counted once. An asset owner may have more than one contract with one or more beginning farmers, but will still be counted only once.
2. Beginning Farmers - Each individual who is qualified as a beginning farmer is counted once. A beginning farmer may have more than one contract with one or more asset owners, but will still be counted only once.
3. Cases - An application packet that has been sent in with applications completed by the owner of agricultural assets and the beginning farmer who have signed a rental agreement for three years that qualifies for the tax credit.
+The numbers in this column will change due to the acceptance of additional applications that have been signed and dated prior to the end of the owner's 2002 tax year.
*An agricultural owner may rent to more than one beginning farmer and a beginning farmer may rent from more than one agricultural owner. Therefore, the number of owners and beginning farmers may not be the same.
| Inquiries From: | August 1999 - June 30, 2000 | July 1, 2000 - June 30, 2001 | July 1, 2001 - June 30, 2002 | Total Inquiries |
| Beginning Farmers | 3 | 63 | 83 | 149 |
| Asset Owners | 8 | 15 | 53 | 76 |
| Organizations or Businesses | 4 | 21 | 53 | 78 |
| Yearly Totals | 15 | 99 | 189 | 303 |
| Nebraska Farmer Articles | 18 |
| Nebraska State Tax Form | 17 |
| Dale Carter's Tax Seminars | 17 |
| CPA or Tax Preparer | 14 |
| UNL Farm Transition Specialist | 13 |
| Nebraska Department of Agriculture Staff | 13 |
| Nebraska Department of Revenue's Newsletter | 12 |
| Shows, Conferences, Workshops | 11 |
| Beginning Farmer | 10 |
| Hometown Newspaper | 10 |
| Radio | 8 |
| Senator, State Senator, or Congressman | 8 |
| Center for Rural Affairs Newsletter | 8 |
| Rural Electric Nebraskan Article | 7 |
| Nebraska Department of Agriculture's Web Page | 6 |
| Center for Rural Affairs Staff | 5 |
| Word of Mouth | 5 |
| Extension Educators | 3 |
| Farm Service Agency Mailing or Staff | 3 |
| Community College Staff | 2 |
| Attorney or Banker | 2 |
| Various Mailings | 2 |
| Asset Owner | 2 |
| Board Member | 2 |
| Phone Book | 1 |
The National Farm Transition Network Annual Meeting was held in Richmond, Virginia, in July of 2001. The network membership includes various groups, agencies, and programs which provide education and services to promote the next generation of farmers and ranchers. Members from Nebraska in attendance were Dave Goeller, University of Nebraska Cooperative Extension Beginning Farmer Program; Joy Johnson, Center for Rural Affairs; and Marian Beethe, Nebraska Department of Agriculture Beginning Farmer Program. The meeting included a report from each member to share program ideas and new initiatives with the group and a report from Charles Ingram, The National Association of State Departments of Agriculture (NASDA), on NASDA'S 2002 Farm Policy Initiative Interim Recommendations.
The Beginning Farmer Display Booth was staffed by Marian Beethe at the following events and trade shows during this fiscal year. She also gave talks about the Beginning Farmer Program at the Nebraska Farm Exposition in Columbus and at the "Farming: Blessed or Stressed?" workshop in Scotia.
The Beginning Farmer Task Force was formed to coordinate the promotion of the Beginning Farmer Programs through joint endeavors, a web site, a central phone number, educational programs, and by developing new ways to broaden the opportunities for beginning farmers. Members of the newly formed group are Bob Jedlicka, Nebraska Farm Service Agency; Joy Johnson, Center For Rural Affairs; Patricia Schuett Peterson, Kutak Rock LLP, representing Nebraska Investment Finance Authority (NIFA); Dave Goeller, UNL Beginning Farmer Program; Paul Cernik, Nebraska Farm Service Agency; and Marian Beethe, Nebraska Department of Agriculture Beginning Farmer Program.
UNL Cooperative Extension Service educator, DeLynn Hay organized an electronic in-service on resources for beginning farmers for the Extension Educators throughout the state. As part of his presentation for the in-service, Dave Goeller described how agricultural asset owners who rent to beginning farmers can qualify for state income tax credits. Beginning Farmer brochures were also mailed to the Extension Educators.
The Nebraska Department of Revenue held a series of seminars for tax preparers across the state. Dale Carter presented information and distributed brochures on the Beginning Farmer Tax Credit Act and Program.
The Nebraska Department of Revenue and the Nebraska Department of Agriculture updated their web sites with new information on the Beginning Farmer Program.
The "Farming: Blessed or Stressed?" Workshop was held at the Scotia Community Center on April 21, 2002. Joanne Komenda and Marian Beethe presented information on the Beginning Farmer Program to approximately 90 farmers and their families.
The Nebraska Farm Exposition in Columbus held informative talks throughout the show on January 15-16, 2002. Marian Beethe presented information on the Beginning Farmer Program both days of the show, in addition to staffing the trade show booth. This led to a radio interview for the stations associated with the Three Eagles Communications (FARM-NET, KZ-100, KTTT, and KKOT) and a story in the Columbus Telegram on the Beginning Farmer Program.
"When Ryan learned of Nebraska's Beginning Farmer Tax Credit program, he wanted us to get involved in it. It was a kind gesture on his part, as it showed his appreciation to us for helping him to start farming on his own. We will receive a tax credit on our state income tax on the rent Ryan pays us. Ryan receives a three-year rental agreement, although we're hopeful of a very long-term arrangement with Ryan."
Martin Schmidt, farm owner
Beginning Farmer Program; Shared Strength Build a Future
Rural Electric Nebraskan, November 2001
"If I quit, my son would have had to hire someone, and there's a lot of headaches there,"
Schmidt says. "It makes more sense to rent the rest to Malcolm," he adds. One advantage to
renting to Malcolm, who lives just across the road now, is that Tim Schmidt [Martin's son] has
someone with whom to trade labor for two- person jobs, such as moving irrigation pipe.
They help each other out."
Martin Schmidt, farm owner
Shared Strength
Nebraska Farmer, November 2001
"He did a lot for me by renting to me," the young farmer says. "I wanted to give something back,"
Malcolm says. "It was the first land I'd rented, and there was a house to live in too."
Ryan Malcolm, beginning farmer
Shared Strength
Nebraska Farmer, November 2001
"The tax credit provides the monetary incentive for the owner of the agricultural assets (land,
machinery, livestock or facilities) to rent to a beginning farmer rather than selling or continuing
the operation as the active farmer past retirement age."
Marian Beethe, Administrator, Beginning Farmer
Program, Nebraska Department of Agriculture
Beginning Farmer Program; Shared Strength Build a Future
Rural Electric Nebraskan, November 2001
"This partnership clearly demonstrates the intent of this program. The retention of young farmers
is a concern and we hope this program is one way to keep Nebraska agriculture economically
healthy."
State Senator Roger Wehrbein, sponsor
Nebraska Beginning Farmer Tax Credit Act
Beginning Farmer Program; Shared Strength Build a Future
Rural Electric Nebraskan, November 2001
Note: Ryan Malcolm and Martin Schmidt are the first beginning farmer and asset owner pair to be approved for Nebraska's Beginning Farmer Tax Credit.
"Qualifying for a $1,000 credit from the state may be simpler than people realize," explained Joy
Johnson, the Center's farm transition specialist. "For example, renting a quarter section to a
beginning farmer at $125 an acre amounts to $20,000 in income, resulting in a $1,000 credit."
Joy Johnson, Farm Transition Specialist
Beginning Farmer Tax Credit
Center for Rural Affairs Newsletter, November 2001
| Date | Publication, Television or Radio Station | Headline | Reporter or Writer |
| July 6, 2001 | Nebraska Department of Agriculture News Release | MINDEN PRODUCER IS STATE'S FIRST BEGINNING FARMER TAX CREDIT RECIPIENT | Sara Olson |
| November 2001 | Rural Electric Nebraskan | Beginning Farmer Program Shared Strengths Build a Future | Dirk Maley |
| November 2001 | Center for Rural Affairs Newsletter | Beginning Farmer Tax Credit | Joy Johnson |
| November 2001 | Nebraska Farmer | Shared Strength Giving a break to young farmer equals tax credit for owner | Ann Toner |
| November 2001 | Nebraska Bankers Association Newsletter | Beginning Farmer Program | Marian Beethe |
| December 2001 | Mediator Newsletter 2001 Special Edition | BEGINNING FARMER TAX CREDIT PROGRAM; ANOTHER SEED OF HOPE | Joanne Komenda |
| January 17, 2002 | Columbus Telegram | Just starting out down on the farm Program gives farmers tax credit for helping beginners get started | Julie Blum |
| February 1, 2002 | Ag Journal | Nebraska encourages new farmers | Columbus, NE (AP) |
| April 2002 | Nebraska Department of Agriculture Veterinarian Newsletter | Beginning Farmer Tax Credit Program | Joanne Komenda |
| April 2002 | Fremont Flyer | Credit available for anyone who helps a beginning farmer | |
| May 2002 | Nebraska Radio Stations | Radio Interview with Beginning Farmer Administrator Marian Beethe | Sara Olson |
| June 2002 | Associated Press | Interview with Marian Beethe Published in July 2002 | Scott Bauer |