Ron Reeves didn’t get into farming to get rich, but he can feed his family and pocket a few dollars here and there to help pay for extras, like nice gifts at Christmas.
Reeves is what’s known as a “smallholder” someone who raises livestock and gardens a small portion of land – in Reeves’ case, about 10 acres. But despite his farm’s small size, he qualifies for tax-exempt status when it comes to certain items like feed, equipment and fuel used for his endeavor.
“My wife and I raise cows, hair sheep for meat, chickens and guineas,” said Reeves. “Gaining tax-exempt status is fairly easy; you just fill out some forms, and review it annually, making any changes necessary. To qualify, you have to have equipment related to food production, like a tractor, and the permit is good for several years.”
Tax-exempt permit forms are available through the Cherokee County Assessor Marsha Trammel’s office.
Trammel said requirements for gaining the permits has changed over the years.
“An agriculture tax permit removes sales tax from various items, including feed, fencing and fuel purchased for the farm,” said Trammel. “The requirements are pretty simple. A person has to own property and an assessed need, meaning they own a tractor, livestock and produce food. They fill out the form and we mail it to the Oklahoma Tax Commission, where they review the information and grant the permits. Property taxes must be current to apply, and the property has to be used for agricultural purposes.”
Reeves said permitting is a fairly simple process and the benefits are helpful.
“Everyone at the assessor’s office is very helpful, and the permit gets you a break on the price of feed, since you’re not having to pay taxes on it,” said Reeves. “That’s been especially important the past couple of years because of the droughts. It’s also important to remember to keep accurate records of the sale and purchase of animals and feed, as it can be used when you file taxes at the end of the year.”
Gary Rogers, county executive director of the Farm Service Agency for Cherokee, Adair and Sequoyah counties, said in previous years, some farmers have taken advantage of a drought assistance program known as Livestock Forage Disaster Program. The program expired last year, but he hopes that it will be included in the new federal farm bill. The bill passed the U.S. House of Representatives, and will be mulled by the Senate in September.
LFP provides compensation to eligible livestock producers that suffered grazing losses for covered livestock on pasture land that occurred between Jan. 1, 2008 and Oct. 1, 2011.
“In the three counties we work in, we passed out about $2 million in LFP funds, and statewide, the funding was about $80 million,” said Rogers. “To qualify, a farmer had to have purchased pasture insurance, which cost s $250, or be a member of a socially disadvantaged group, a person of limited resources or a beginning farmer. In our part of the country [Northeast Oklahoma], we don’t have a lot of drought, so most people don’t purchase the drought pasture insurance. Most of the people who qualified for the LFP program were Native American, and we had about 500 participants.”
Rogers said the new farm bill may include the LFP, with a few changes.
“I don’t know all of the particulars, but it sounds like everyone who pays the $250 fee for the insurance will be eligible,” said Rogers. “It’s not a loan and there are no restrictions on how the funds are used. If you’re a commercial livestock producer with pasture, you can apply. They won’t allow rodeo contractors or people who raise cows and horses for pleasure or show to apply, though. While we don’t have any details yet, we keep telling everyone to call us every 30 days to check on the status.”
With this year’s drought, Rogers said he expects the number of applicants to triple.
“Right now, though, things are greening up, and [Tropical Storm] Isaac may bring some rain,” said Rogers. “I expect most applications will be to help defray the high cost of feed, as corn prices continue to rise.”
Reeves said he’s checked into receiving assistance from the Farm Service Agency.
“Since we have such a small acreage, we didn’t meet the requirements,” said Reeves. “But it was worth looking into just for the general information. The folks at FSA and the Oklahoma Cooperative Extension Service are very helpful with information, especially if you’re just starting out in farming.”
Reeves has had his agriculture operation since 1995.
“It doesn’t equate to a lot of income, but you can definitely feed yourself on a small acreage,” said Reeves. “We have beef and lamb, and I have a friend who raises hogs, so we have access to pork. We have plenty of food in the freezer and fresh eggs every day. This summer, we had peaches and cucumbers and five different varieties of tomatoes.”
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