Declining Ag Economy Will Pose Challenges for Nebraskans

steve corn head shotIn Nebraska, there’s a telltale sign that we’re transitioning from summer to fall. It’s the dramatic change that happens on Saturday’s when no matter where you go in the state, you start seeing plenty of scarlet and cream. The University of Nebraska and Husker athletics, like the weather, is something you can strike up a conversation with virtually anyone. It connects many of us no matter where you live or what you do for a living.

While the relationship between Nebraskans and Husker athletics is apparent, there’s something else that connects Nebraskans as well; agriculture. On its face, the connection might not seem as obvious, but if you dig a little deeper, the connection is abundantly clear.

While only three percent of Nebraskans identify themselves as farmers and ranchers, the end product of their efforts in producing crops and livestock translates into creating jobs for one out of every four Nebraskans.

A study released by the University of Nebraska in 2012 leaves little question about agriculture’s connection and importance, whether you’re more likely to drive to work on six lanes of pavement or drive cattle down a gravel road.

To quote the study which looked at 2010 numbers to evaluate agriculture’s importance, “The combined direct and indirect effects of the agricultural production complex on Nebraska’s economy are considerable. In short, more than a fourth of the Nebraska’s economy can be attributed to the agricultural production complex.”

The study goes on to point out that, “While the nation’s economy was hit by the Great Recession followed by years of anemic recovery, this state’s economy has fared much better than most, in large part due to the prosperity within its agricultural sectors.”

The take away message from the report is simple. When Nebraska agriculture does well, so do Nebraskans. It was Nebraska’s connection to the agriculture that helped Nebraska families work through one of the lowest economic points in our nation’s history. And while agriculture had been riding a wave of momentum, things have changed.

Since 2013, the agriculture economy has done an abrupt about face. In Aug. USDA put out its projects for net farm income for 2015. The projections for farm income reflect a 50 percent decline in farm income over the last two years. It’s the equivalent of someone walking into their place of work and finding their salary or per-hour wage has been cut in half.

The transition in the agriculture economy will have broader ramifications for the state and the people and families who live here. Farmers and ranchers, while small in number, serve as the ignition point for the state’s economic activity. The ripple effect is already being felt. In late Aug. CNH Industrial America, which manufactures agriculture combines in Grand Island, reduced its workforce by 70 employees. That comes on the heels of cutting 136 jobs in February and 230 positions in August of 2014.

The loss of purchasing power by farmers and ranchers will trickle down and be felt across the state. The connection between agriculture and Nebraska’s economy is just that strong. That’s why Nebraska Farm Bureau continues to advocate for policies to keep a vibrant ag economy, whether that’s working to address a property tax burden that is threatening the viability of farms and ranches or pushing back on needless regulations that stifle growth opportunities.

At the end of the day, all Nebraskans have a connection to agriculture; and the connection isn’t just limited to the food on our plates.

 

Until next month,

Steve Nelson, President, Nebraska Farm Bureau Federation

Imbalance in Property Taxes Nothing to Be Proud Of

Steve Nelson1I recently had the opportunity to travel across Nebraska to visit with Farm Bureau members to talk about our efforts to secure property tax relief during the 2015 Legislative session. It was the first of what I hope will be several trips to connect with members on taxes and other key issues.

This particular trip started in Hastings and went west to Sidney. Along the way, I stopped to do several radio, television and newspaper interviews to explain why property taxes are such a point of concern for farm and ranch families and to outline what we believe are possible solutions to relieve a growing property tax problem.

It was a great experience, but a very real reminder that we have a lot of work to do in communicating the need for property tax relief, whether that be to members of the media or to our elected officials who will ultimately vote on key tax relief initiatives.

In making our case, I often point out that while property taxes are too high in general, they are particularly challenging for farmers and ranchers because of the nature of our business. Land is basic to farming or ranching. No occupation requires as much land as agriculture does. I talk about the fact that taxes on agriculture land have increased 162 percent since 2004, while residential and commercial land taxes during the same time have experienced considerably smaller increases.

I also point out that while farmers and ranchers represent less than three percent of our state’s population, we are now paying nearly one-third of the total property taxes collected statewide. A fact that clearly illustrates our statewide property tax burden is completely out of balance.

I’ve actually had some people (not farmers or ranchers) indicate to me that they don’t see a problem with so few people paying such a large portion of the property tax. I don’t understand that line of thinking and I’m not sure why any Nebraskans should be proud of a tax system that places the responsibility for the majority of funding for local government and schools on the backs of a small group of people. I guess the idea of equity in the state’s tax system wasn’t something these individuals cared about.

Having said that, it points out that we in agriculture have much work to do in explaining why property taxes are of such great concern. Nebraska Farm Bureau will continue to lead the way to find solutions that provide equity in our property tax system and tax relief to farm and ranch families.

Until next month,

Steve Nelson, President, Nebraska Farm Bureau Federation