U.S. Senator Mitch McConnell introduced The Protecting American Farmlands Act, legislation that reduces the tax burden on selling farmland, encouraging farmers to keep their land in agricultural production and curbing the loss of farmland across the country.
During a Senate Agriculture Committee hearing, Senator McConnell discussed his bill and the impact it would have on farmers, especially in Kentucky.
The Kentucky Farm Bureau, a supporter of McConnell’s legislation, recently launched the Kentucky Farmland Transition Initiative (KFTI), a coalition aimed at uncovering ways to help farmers transition acreage to future generations of farmers. KFTI found that farmers tend to hold onto their land to avoid paying capital gains taxes on their property.
The Protecting American Farmlands Act would exempt farmers from capital gains tax if they sell their land to farmers who will keep it in agricultural production for a minimum of ten years. The profit from the sale is stored in a qualified retirement savings account. As a result, landholders are encouraged to put their farmland on the market for other farmers, while also investing in their own future with more liquid assets in retirement.
“American farmers, especially those in Kentucky, are grappling with a steady decline in available farmland,” said McConnell. “Now more than ever, we must preserve our agricultural land and keep it in production for the next generation of producers. The Protecting American Farmland Act reduces the tax burden on selling farmland, making it easier for retiring farmers to keep their land in the hands of those who will continue to cultivate it.
“This legislation, which I was proud to partner with the Kentucky Farm Bureau on, is a big win for farmers across the country, and one that will help plant the seeds of farming generations to come.”
“Kentucky Farm Bureau is proud to stand alongside Senator McConnell once again in championing legislation that strengthens the future of American agriculture,” said Eddie Melton, president of Kentucky Farm Bureau Federation. “The Protecting American Farmlands Act is the outgrowth of important work started last year by the Kentucky Farm Bureau Farmland Transition Initiative. This legislation not only helps ensure that our nation’s farmland remains in the hands of active farmers, but it also provides retiring farmers with a viable pathway to transition their operations to the next generation.
“We deeply appreciate Senator McConnell’s leadership in addressing this issue, and we look forward to the lasting impact this legislation will have on farming communities here in Kentucky and across the country.”
According to the 2022 USDA Census of Agriculture:
• Over the past twenty years, Kentucky farmland acreage has declined from 13.8 million acres in 2002 to 12.4 million acres in 2022.
• In just the last five years, Kentucky lost 546,000 acres of farmland, an average of 290 acres lost per day.
• In the last five years, the number of farmers in Kentucky has decreased 9%.
• The number of farms in Kentucky has decreased from 86,541 farms in 2002 to 69,425 farms in 2022.
• Kentucky farmers average age is 57.1 years old, and approximately 1.3 million farmers nationwide are now at or beyond retirement age.
The full bill is available at www.mcconnell.senate.gov.
Office of Senator Mitch McConnell
What? Mitch McConnell is finally proposing something that will benefit someone other than himself? It’s about three decades too late!