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Legislative bills

Protecting American Farmlands Act Signed Into Law

Strategic Insights

— 2 min read

As part of the One Big Beautiful Bill Act signed into law by President Trump on Independence Day, Senator Mitch McConnell's legislation, The Protecting American Farmlands Act, aims to reduce the tax burden on selling farmland, encouraging farmers to keep their land in agricultural production and curbing the loss of farmland across the country. The legislation was introduced by Senator McConnell in March and has been supported by the Kentucky Farm Bureau. A coalition, the Kentucky Farmland Transition Initiative (KFTI), has been established to help farmers transition acreage to future generations of farmers. The initiative found that farmers tend to hold onto their land to avoid paying capital gains taxes on their property. The Protecting American Farmlands Act would defer the capital gains tax over a 4-year period if they sell their land to a farmer who will keep it in agricultural production for a minimum of ten years.

Key Takeaways:

  • The Protecting American Farmlands Act was signed into law as part of the One Big Beautiful Bill Act, aiming to reduce the tax burden on selling farmland and encourage farmers to keep their land in agricultural production.
  • Senator Mitch McConnell introduced the legislation in March, working to secure its inclusion in the One Big Beautiful Bill Act.
  • The Kentucky Farmland Transition Initiative (KFTI) was established to help farmers transition acreage to future generations of farmers.
  • The initiative found that farmers tend to hold onto their land to avoid paying capital gains taxes on their property.
  • The Protecting American Farmlands Act would defer the capital gains tax over a 4-year period if farmers sell their land to a farmer who will keep it in agricultural production for a minimum of ten years.
  • Senator McConnell praised the passage of the legislation, stating that it addresses the decline in available farmland and provides relief to hardworking producers.
  • Eddie Melton, President of the Kentucky Farm Bureau Federation, praised Senator McConnell's efforts on the issue, stating that the inclusion of capital gains tax relief is a crucial step in providing America's farmers with another tool for transitioning their land.

Statistics:

  • Over the past twenty years, Kentucky farmland acreage has declined from 13.8 million acres in 2002 to 12.4 million acres in 2022 (2022 USDA Census of Agriculture).
  • In just the last five years, Kentucky lost 546,000 acres of farmland, an average of 290 acres lost per day (2022 USDA Census of Agriculture).
  • In the last five years, the number of farmers in Kentucky decreased by 9% (2022 USDA Census of Agriculture).
  • The number of farms in Kentucky decreased from 86,541 farms in 2002 to 69,425 farms in 2022 (2022 USDA Census of Agriculture).
  • The average age of a Kentucky farmer is 57.1 years old, and approximately 1.3 million farmers nationwide are now at or beyond retirement age (2022 USDA Census of Agriculture).

Sources:

  • https://www.mcconnell.senate.gov/public/index.cfm/pressreleases?ID=50BCC62A-6C8D-457F-BA1E-4483A5201A28
  • 2022 USDA Census of Agriculture.

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