(Indianapolis, IN) - A bill aimed at benefiting older farmers and people looking to break into farming is not gaining much, if any, traction during this year’s Indiana General Assembly session.

 

Senate Bill 176 calls for an adjusted gross income tax credit for owners of agricultural property who sell or rent their assets to a qualified beginning farmer. The tax credit would be up to five percent of the sale price or fair market value of the property not to exceed $32,000. The renting tax credit would be 10 percent of the gross rental income annually for up to three years or no more than $7,000 per year.

 

Under the bill, the amount of tax credits awarded statewide during the 2024-25 fiscal year would not be able to exceed $5 million and $6 million in the fiscal years that follow.  

 

The measure was presented by State Senator Mary Yoder (D) of Bloomington, who explained how the bill is designed to make it easier for people to become first-generation farmers by helping those wanting to break into farming compete in bidding with other prospective land buyers. She said the tax incentive would also be an incentive for farmers to keep their farmland in production with a beginner, instead of selling to housing or commercial developers.

 

“Indiana is an agricultural state and we need to protect our working farmland and that tax credit can be just one mechanism to do that,” she said.

 

Yoder, who grew up in Shipshewana, noted how the measure would also help meet the growing challenge of having enough young farmers coming up from the ranks to replace aging food producers. In Indiana, the average age of a farmer is 56.

 

“We have folks who want to get into farming and it’s getting harder and harder to do that,” she said.

 

The bill defines a beginning farmer as someone with experience in the agriculture industry or a related field with skills that can used in farming, and someone who has not received income from food production for more than ten of the most recent taxable years. A beginning farmer must also be certified as such by the Indiana Economic Development Corporation. Likewise, the spouse of a beginning farmer must also not be a partner or shareholder of an owner of agriculture assets sought for purchase or rent, like tractors and other machinery as well as livestock.

 

Yoder said she drafted the bill after learning about some of the various needs and issues facing agriculture during workshops, meetings, and other related gatherings last year.

 

One of the challenges is keeping farms in the family since households nowadays have fewer children. She said a farmer receiving a tax credit for selling or renting to a beginner could sort of carry on that tradition as a mentor by sharing expertise and other knowledge with the purchaser or renter.

 

“I want to see more people have the opportunity to say one day I come from a second generation farmer. That more people feel like farming includes them and it’s not for a particular person or a particular family,” she said.

 

The bill is now before the Senate Committee on Tax and Fiscal Policy.

 

Yoder said she was recently informed the proposal will not get a hearing this year in the Republican-dominated legislature, but she vows to present it again for consideration in 2025.

 

“It is such a benefit to farmers who want to retire and are interested in keeping the farmland, farmland,” she said.