4 ms·

That second comment nails it. Family farms are going the way of the dinosaur, and large outfits want a machine they can use for three seasons, depreciate and el

by Loughla 12y ago

That second comment nails it. Family farms are going the way of the dinosaur, and large outfits want a machine they can use for three seasons, depreciate and eliminate for both a tax write-off and upgrade. I legitimately believe we'll see the death of true family farms in my lifetime (I'm in my 30's). What we'll see are family farms in name only, with a multi-million dollar, multi-national backend.

benmanns 12y ago
Why would you spend $100k on a tractor every 3 years to get a $30k discount on taxes?
- jchrisa 12y ago
  The used market is pretty good.
  - graeme 12y ago
    But you need to declare the sale as capital gains. I also don't understand this argument. I use computers for my business. It makes it cheaper to get one for business than for personal use, but I'd still like the things to last as long as possible.
    - Spooky23 12y ago
      A PC is different because there isn't much correlation between age and operating costs. With something like a server, as long as you can deploy them quickly, you actually can reduce costs by replacing them in step with the Intel tick/tock cadence.
  - kalleboo 12y ago
    Only for as long as the DRM key-holders allow it to be
- Trisell 12y ago
  Because in the US, a tractor is considered an tool, and thus the farmers/farms get a 100% write off of the entire purchase price.
  - WalterBright 12y ago
    A tax credit is not the same thing as a deduction (write off). A credit goes dollar-for-dollar against taxes owed. A deduction reduces the amount to which the tax percentage is applied.
- unchocked 12y ago
  I suspect they run the used asset (say worth $70k) through some sleight of hand with subsidiaries or leasing agents to avoid the depreciation recapture tax of selling it for its true worth. Voila, free tractor.
deleted 12y ago
[deleted]
mpatobin 12y ago
I don't know the breakdown of farms in the US but in Canada "family farms" supppsedly make up 98% of all farms. This includes mega farms that are owned by families Source: industry published reading material at a farming AGM
- ndespres 12y ago
  Like many statistics, that number can mean what you want it to mean. I would venture to guess that the percentage of food grown on family farms, vs mega farms, is under 10%.
- sanoli 12y ago
  I don't think the parent meant 'mega farms that are owned by families' to be the same thing as 'family farms'.
  - lacksconfidence 12y ago
    but they are pretty much the same. One of my uncles(by marriage) runs a multi-million dollar farm with his brother. They started it from nothing about twenty years ago and now they grow millions a year in crops. This isn't some giant mega corp, this is two guys who have grown their business. Banks are thrilled to loan my uncle money to get more land, equipment, etc because he has a proven track record of turning loans into profits and returning their money. Sure its just anecdote, but based purely on personal experience i feel like the family farms that go out of business are because they are not any good at business. The farms that are good at business just get bigger.
    - AnthonyMouse 12y ago
      A "multi-million dollar farm" is also known as a farm. People who grow crops on 10 acres of land are basically doing it as a hobby. The dividing line isn't between farms that have $500,000 in revenue vs. $5,000,000 in revenue, it's between "family" farms that have ~$5,000,000 in revenue and farm companies that have $5,000,000,000+ in revenue.
arca_vorago 12y ago
I worked in BigAg in the panhandle for a bit, and I agree and lament this fact. What gets me the most is that all the politicians and people like to imagine the self sufficient farming community as it used to be and then run on platforms claiming to support it, when in reality what they are supporting is the megacorp farming industry which is quickly forcing family run operations into selling out in one way or another, whether it be via huge debt on equipment or on corporate governed coop. Don't even get me started on Monsanto... or the oft cited scientific studies that secretly have huge biases (follow the funding). I quit the industry because of these practices, if that makes anyone feel any better. Actually it was a funny story because everyone loved the millionaire owner who "always took care of everyone". I never liked him and knew some things about the origins of his money no-one else did that influenced my decision to leave, and a year after I left he fired half the staff and sold all the branch locations. Working with the geneticists there did open the door for my working in a cutting edge DNA lab though, so it wasn't all bad.

by Loughla 12y ago

benmanns 12y ago

Why would you spend $100k on a tractor every 3 years to get a $30k discount on taxes?

jchrisa 12y ago
The used market is pretty good.
- graeme 12y ago
  But you need to declare the sale as capital gains. I also don't understand this argument. I use computers for my business. It makes it cheaper to get one for business than for personal use, but I'd still like the things to last as long as possible.
  - Spooky23 12y ago
    A PC is different because there isn't much correlation between age and operating costs. With something like a server, as long as you can deploy them quickly, you actually can reduce costs by replacing them in step with the Intel tick/tock cadence.
- kalleboo 12y ago
  Only for as long as the DRM key-holders allow it to be
Trisell 12y ago
Because in the US, a tractor is considered an tool, and thus the farmers/farms get a 100% write off of the entire purchase price.
- WalterBright 12y ago
  A tax credit is not the same thing as a deduction (write off). A credit goes dollar-for-dollar against taxes owed. A deduction reduces the amount to which the tax percentage is applied.
unchocked 12y ago
I suspect they run the used asset (say worth $70k) through some sleight of hand with subsidiaries or leasing agents to avoid the depreciation recapture tax of selling it for its true worth. Voila, free tractor.

deleted 12y ago

[deleted]

mpatobin 12y ago

I don't know the breakdown of farms in the US but in Canada "family farms" supppsedly make up 98% of all farms. This includes mega farms that are owned by families Source: industry published reading material at a farming AGM

ndespres 12y ago
Like many statistics, that number can mean what you want it to mean. I would venture to guess that the percentage of food grown on family farms, vs mega farms, is under 10%.
sanoli 12y ago
I don't think the parent meant 'mega farms that are owned by families' to be the same thing as 'family farms'.
- lacksconfidence 12y ago
  but they are pretty much the same. One of my uncles(by marriage) runs a multi-million dollar farm with his brother. They started it from nothing about twenty years ago and now they grow millions a year in crops. This isn't some giant mega corp, this is two guys who have grown their business. Banks are thrilled to loan my uncle money to get more land, equipment, etc because he has a proven track record of turning loans into profits and returning their money. Sure its just anecdote, but based purely on personal experience i feel like the family farms that go out of business are because they are not any good at business. The farms that are good at business just get bigger.
  - AnthonyMouse 12y ago
    A "multi-million dollar farm" is also known as a farm. People who grow crops on 10 acres of land are basically doing it as a hobby. The dividing line isn't between farms that have $500,000 in revenue vs. $5,000,000 in revenue, it's between "family" farms that have ~$5,000,000 in revenue and farm companies that have $5,000,000,000+ in revenue.

arca_vorago 12y ago

I worked in BigAg in the panhandle for a bit, and I agree and lament this fact. What gets me the most is that all the politicians and people like to imagine the self sufficient farming community as it used to be and then run on platforms claiming to support it, when in reality what they are supporting is the megacorp farming industry which is quickly forcing family run operations into selling out in one way or another, whether it be via huge debt on equipment or on corporate governed coop. Don't even get me started on Monsanto... or the oft cited scientific studies that secretly have huge biases (follow the funding). I quit the industry because of these practices, if that makes anyone feel any better. Actually it was a funny story because everyone loved the millionaire owner who "always took care of everyone". I never liked him and knew some things about the origins of his money no-one else did that influenced my decision to leave, and a year after I left he fired half the staff and sold all the branch locations. Working with the geneticists there did open the door for my working in a cutting edge DNA lab though, so it wasn't all bad.