Income Tax Credit Approved For Alabama Farmers

The Huntsville Times has just reported on the newley signed bill giving Alabama farmers a tax credit. Read the story here...

HUNTSVILLE, Alabama -- With nearly 90 percent of the state in drought conditions, a tax credit recently signed by Gov. Robert Bentley couldn't have come at a better time for farmers.

The bill, sponsored in the Senate by Arthur Orr of Decatur, provides an income tax credit of up to 20 percent of the cost of irrigation systems or building reservoirs and wells, but it's not to exceed $10,000.

"It's a first step," Orr, R-District 3, said. "When you're talking about thousands of dollars in equipment or the cost when building a reservoir.

"Hopefully the ag community will take advantage of it."

According to the most-recent survey by the U.S. Drought Monitor, Madison, Limestone, Marshall, Morgan and Jackson counties are "abnormally dry" while the extreme northern parts of Madison and Jackson counties are in moderate drought conditions.

Thomas Atkinson, the Madison County executive director for the USDA Farm Service Agency, said he would be "hard pressed to plant dryland corn in the Tennessee Valley" but calls the tax credit beneficial for farmers and producers. Dryland corn is the crop that is not irrigated, relying on rainfall, instead.

"It's hit and miss to plant grains" because of the importance of water to those particular crops, he said. "But this would benefit crops and the producers - especially for grains.

"Irrigation systems are very expensive and this is very beneficial."

Orr said he was spurred to push the legislation after hearing a presentation by Dr. John Christy of the University of Alabama in Huntsville. Christy, who is also the state's climatologist, discussed the water management problems being faced by Western states.

"We are blessed as a state with water," Orr said.

Glen Zorn, the state assistant commissioner of agriculture, agreed that the tax credit is a "good starting point" because a lack of water isn't the problem, "water management is our problem."

"Alabama has 19 major aquifer systems and 14 major rivers," he said. "And we get 56 inches of rain (a year)."


He said it could also prove to be a major boost to the state's economy.

"There are only 48,000 farmers but farming goes beyond the farm gate," Zorn said. "475,000 people are employed in agribusiness in the state."

Also, the state is hurting, he said, because so few acres are irrigated, compared to what could be irrigated.

"Only 175,000 acres are under irrigation but we have the potential of getting 2.5 million acres of prime farmland irrigated," he said. "If we could move toward irrigation, it could be a key economic boost for Alabama."

The lack of irrigation results in the state "importing" from other states millions of bushels of corn, soybeans and other products to help feed the state's burgeoning livestock and poultry industry.

"We've got to step up to the play and increase production," Zorn said. "Our yields on dryland corn are about 50 bushels per acre. Irrigated is 200 bushels per acre.
"It's a huge difference."

Orr also stressed the importance irrigation is to having a more reliable crop production.

"The tax credit can really have an impact," he said. "If we encourage the irrigation aspect, we might have a renaissance in crop production.

"There's always going to be a need for food production."

 

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