The State of Agriculture

The State of Agriculture

The truly creative idea of freedom can only fully blossom within the totality of the folk, when our race has air to breathe and land for farming. An effective vital honour will therefore only be seen at work in a nation which has sufficient living space at its disposal. Where the idea of national honour is elevated, the demand for space will be deeper. For this reason neither Jewry, alien to the soil, nor Rome, equally alien to the soil, recognises the idea of honour. More precisely, they do not recognise this idea because there is no longing active within them for farmland. It is farmland upon which a strong and happy race scatters its fruit bringing seed. Today, all the enemies of Germany attack our honour, and they have also stolen Germany’s living space. For these reasons, in the final analysis, the metaphysical struggle revolves around the innermost values of character. It signifies a struggle for living space. One strengthens and reinforces the other. With sword and plough! For honour and freedom! -Alfred Rosenberg

Agriculture in the United States is in a peculiar state. This will be the first of a few articles where I discuss the state of agriculture as a whole. I’d like to start off by discussing how Whites fit into the ag sector as well as a possible future for increasing Whites in agriculture.

To start, it’s important to note that farming in the US is still an overwhelmingly White male endeavor. According to the 2012 Census of Agriculture, the number of farms with White operators is 2,034,439 compared to 2,109,303 total farms. That means that over 96% of farms are managed and controlled by Whites in the United States. Another important way to look at this is the number of acres total that is managed and controlled by White farmers. 862,198,053 acres are managed by Whites compared to the total of 914,527,657 total acres farmed in the US. This tells us that 94% of the farmland in the US is controlled by Whites. So what does 862 million acres look like? For perspective, the total acreage in Alaska is 424.5 million. So, the farmland that Whites control in the US is a bit more than two Alaskas combined.

The next most important thing to know about agriculture is that the average age of the American boer is 58.3 years old, and 25% of farmers are over 65 years old. It’s not hard to imagine that within the next 10 years, many many farms are going to change hands. A farmer’s dream is to pass his place to his children, but trends suggest that that hasn’t been happening. From 2007 to 2012 the number of new farmers is down by 20%. What does that mean exactly? It means that there are fewer farmers total, but the farmers that are left have been expanding their farms. For example, from 2011 to 2013, the number of 2,000-acre farms increased from 1.7% to 2.2%. What this means for certain is that less children are inheriting the family farm, and instead, their father’s farms are being bought by existing farmers.

*Here I’d like to make a note that I don’t see anything inherently wrong with large farms. There is increased efficiency with larger farms, but this article isn’t concerned about efficiency. Rather, it’s concerned about creating new farmers.

The question now is, “why aren’t young people getting into farming?” It’s not that farming isn’t profitable, it still is. And interestingly enough, farmers are making about the same amount of money per acre now as they did back then. Over the years as farmers produced more bushels per acre, they received less money per bushel. The result being that a farmer in the 50’s and the 2000’s gross about the same amount of money.

cornprice

The main difference is that land prices have gotten absurdly expensive:

duffy_1_full

So let’s do some simple math. A new farmer in 1950 gets a loan on a 160 acre farm at $600 an acre (adjusted for inflation). He’s going to owe the bank around $99,000 for his loan. The farmer is going to make about $76,800 a year (160 acres x 40 bushels an acre x $12) to pay for his land/tractor/cost of living/farming/house/kids/etc. This is doable.

A new 2010 farmer wanting to farm 160 acres is going to need to pay back a bank loan of around $362,000. He’ll make about $73,500 farming his land, but it’s clear that the 2010 farmer will have a much more difficult time paying back that loan. To be a new farmer in 2010, you have to have a tremendous amount of capital to start. This essentially excludes young farmers looking to buy Dad out of the family farm.

So why can’t the farm be sold to the children at a reduced rate? This is where the Gift Tax comes in. If a property is sold to anyone at below market value, then the gift tax is applied. If a farmer sells his $362,000 farm to his son for $100,000, then $262,000 will be considered a “gift” and is subject to taxation. The current gift tax rate for $262,000 dollars would be 34%. So the farmer then owes the government $89,000 in taxes. Obviously this is a major disincentive for farmers to gift their land to their children. And interestingly enough, the gift tax is avoided for the “gift giver” if the children immediately sell the property. This creates another disincentive for children to keep the farm. Finally, for reasons that I won’t get into, the tax liability of a farmer is most likely something that they can’t afford to add on to by accruing the gift tax. (Ok, I’ll get into it. Every year that you reinvest your profits in to your business, you’re able to make a tax write off for you business. The taxes you avoid stay with you though, so when you finally retire and stop investing, your tax liability includes all the years that you didn’t pay taxes. This is also another reason why farms tend to keep expanding and farmers work so late into their lives. They can’t afford to stop farming and expanding because their tax liability is often something that will strip them of an enormous amount of wealth.)

The next major issue with passing on the farm is the Estate Tax and the Inheritance Tax. The estate tax is common in all states, and the inheritance tax only occurs in some states. The estate tax is particularly harsh. Keeping with our $362,000 example farm from above, the estate will immediately be taxed $70,800 after the farmer’s death. But in addition to that, because $362,000 falls in to a 34% tax bracket, you will be taxed for every dollar that exceeds the base of $250,000. So, $112,000 is then taxed the aforementioned 34% bringing the total amount of taxable money to $108,880. This is equivalent to the government taking 1/3 of the farm.

Now, the main point we need to address with all of this information is this; how do we increase the number of new farmers? Unfortunately the price of land isn’t going to change. Unless we depopulate this country (and many others), farm real estate is always going to be tremendously high. This hurdle will likely remain for any aspiring farmers who don’t have a lot of capital to start with. The estate tax is burdensome and needs serious reconsidering, but for the sake of creating new farmers it isn’t the easiest route. The most practical way to create new farmers is to obliterate the gift tax for farms. This will allow for an easy succession from father to son(s). The one caveat to this idea is that the farmer must prove that he’s been farming for 10+ years to prevent other people from snapping up land and driving up prices even more in order to pass on their inheritance.

The result of this will be something akin to old Germanic Laws. The father would split the land he acquires between his children without state interference. The goal is to keep the farm in the family and give each willing child a chance to farm without taxing the estate into oblivion. The result will be the natural division of land as more farm children would stay on the farm and have to divide the land amongst them selves. Furthermore, farming would be seen as an exceptional way to pass on wealth and many people who would be less inclined to work the land would pursue it as a long term interest.

The consequences of more ruralites would have tremendous effects on our country. To increase the number of farmers is to create more of the same people who helped turn nearly every rural county red in this past election. Besides a simple way to help farmers, this idea of helping pass on farms will add a stronger moral and nationalistic backbone to this country. By increasing the number of those who unwaveringly rejected liberalism for the past 60 years, our country will once again allow traditional values to reign supreme. With more men and women able to work the land we will no longer be subjected to metropolitan rule.

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