Farmers Await Fiscal Cliff Deal

With only a handful of legislative days left until the nation falls over the fiscal cliff, farmers across the country are nervously waiting in anticipation of the damage that could be done without a budget deal.

The fiscal cliff was invented by Congress as an artificial way to force the government to take action on continuing federal deficit spending. Without an agreement to trim about $1 trillion of federal deficits, automatic across the board spending cuts would go into effect. In addition, the Bush tax cuts are set to expire at the same time as the automatic spending cuts, potentially causing a one-two punch that could send the economy into another recession.

Farmers are nervously watching the news and hoping that a deal can be reached soon. The agricultural community has much to lose if the nation should fall over the cliff. The immediate threat could be the sudden and dramatic increase of federal taxes. The increase in the estate tax, in particular, could spell the end of many family farms across the country.

In addition to tax woes, the fiscal cliff deal was the only likely way that farmers could have expected a new farm bill. The failure of Congress to come to a budget deal would mean the failure of Congress to pass a new farm bill. Without new farm legislation, agricultural communities could lose millions of dollars in federal aid (Ohio, for example, could lose nearly $20 million in aid) and farmers would be forced to plan upcoming harvests without any certainty regarding federal risk management programs, insurance programs, or subsidy programs.

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Written by: Justin Ellison / Farm Plus Staff Writer