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In 2010, farmers could face an interesting dynamic of paying taxes on crop insurance payments in 2009, SURE (Supplemental Revenue Assistance Payments) from 2008 and market returns from 2010, explains Chad Hart, ag economist at Iowa State University.
Because of the timing of how SURE has worked out, if farmers delayed crop insurance into the next year, producers could receive payments from three different crop years within this year.
Hart says it will be important for farmers to watch their income and tax implications as SURE payments come out to best spread out income. 2009 crop insurance payments could be pushed off a year, as well as marketing crops forward.
Farmers should evaluate how SURE payments might be claimed within the tax code. "Can you push those forward? Or even back into 2009 even though they were received in 2010 since it was for the 2008 crop? That may be something producers want to check into on the flexibility on when to claim that income," Hart says.
This year is a little more complicated for SURE because the agencies were still writing the rules in 2009. Payments should start to flow here soon, with the sign-up now underway.
Beginning Jan. 4, 2010, producers who incurred crop losses for the 2008 crop year can sign up for the Supplemental Revenue Assistance Payments program (SURE). Eligible growers can apply for the program at their local U.S. Department of Agriculture (USDA) Farm Service Agency (FSA) county office.
SURE, a program of the 2008 Farm Bill, provides assistance in an amount equal to 60% of the difference between the SURE farm guarantee and total farm revenue. The farm guarantee is based on the amount of crop insurance and Non-insured Crop Disaster Assistance Program (NAP) coverage on the farm. Total farm revenue takes into account the actual value of production on the farm as well as insurance indemnities and certain farm program payments.
Policy is one of the most important issues facing farmers today, but often the most difficult to digest. Jacqui Fatka has a passion to decode the often difficult world of agricultural policy into terms understandable for today's ag players.
Fatka joined the Farm Progress team as E-Content Editor in August 2003 after graduating from Iowa State University. Prior to full-time employment with Farm Progress, she interned at Wallaces Farmer magazine, Iowa Sen. Chuck Grassley's press office and the Iowa Pork Producers Association and freelanced for National Hog Farmer. She also worked as a public relations consultant with Iowa Industries for the Future, an effort to bring together major players in the biorenewables industry.
Currently Fatka is a staff editor at a sister publication, Feedstuffs. For Farm Futures she regularly tells the story of ongoing agricultural policy changes. Her byline can also be found on management profiles.
Fatka grew up on a grain and livestock farm near Atlantic, Iowa. She currently lives in central Ohio with her husband Eric.
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