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Published: 08 October 2015

The water wars in the weststarted heating up in 2014. The news and "drought shamming" celebrities are late to the party. In Texas in 2014,  farmers, including a 500 acre cotton farmer, were told they did not have access to  the River Brazos for their crop, but did not restrict the use of cities along the river a well, saying public safety trumps water law principles. The same  year in California, a 1200 acre vegetable operation is only going to plant 400 acres because of water reduction.  In Southern Texas, rice farmers have not had water for 4 years, while Austin continues to consume more and more water. In Nevada, the reservoirs are so low, residents talk about "bath tub rings" around the holding lakes, the record low level expose shore and side wall that haven't seen the sun in a long time.
Nevada and Utah are at odds over shipping water across borders, Kansas is not upset at Colorado Nebraska about leaving the Big 12, but rather about diverting water from the Republican  River that is apportioned to Kansas. Texas and New Mexico are in front of the Supreme Court about water usage.

That vegetable farm that is 2/3ds idle won' t have excess produce to donate to local food shelters as it has in past, nor will it employ as many people. Low lakes means low boating numbers, which cuts into tourism dollars. The laws in the Western States are set up to cause conflict. For example, in some states you can pump as much as you want from under your ground , but if your neighbor pumps it out first, you have no recourse absent a court order. When your neighbor is a new sub development with a passion for orderly neat patches of lush Kentucky blue grass, washed cars and golf courses in a desert , it doesn't  take a fortune teller to see what is coming.

Read more: 500 acres of cotton or water for school kids?

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Published: 08 October 2015

The IRS has cooked up a special mix of fun to generate more revenue. First, they have reduced accelerated depreciation limits to $25,000 and Second, have tightened their position on what is a repair (which is a current year expense and what is a capital improvement which has to be deducted over time). It is enough to drive you to drink, which is why it is referred to as the BAR test. (Betterment, adaption and restoration). If the fix does any of those things, it needs to be depreciated out slowly instead in the year incurred. Betterment = fixes a condition or defect that existed before the purchase of the property, is  a material addition to the property; or increases the property's productivity, efficiency, strength, etc. Adaption =a change a new or different use if   of property to a use from what you bought the property for Restoration. =  puts the property back in working order from non function or rebuilds the property to a like new condition or replaces a major component or structure of the property.

Oil Changes, filter changes and the like which happen more than once during the life span of the item are still allowed as current year expenses.
Don't be surprised if your tax preparer asks more questions this year about your repair category. It would appear that with the recent passage of a higher accelerated expense provision, this issue may not be as critical, as a tax payer maybe able to elect to treat what would be BAR repairs as accelerated expenses.

Who wins with crop insurance?

The company's selling the policies sure do. According to a recent white paper: 'As a result of the significant subsidies crop insurance corporations receive, they consistently generate profits that are considered far above the reasonable rate of return as calculated by economic experts. Between 1989 and 2009, crop insurance companies averaged a 17% return on equity at a time when the 'reasonable' rate was under 13%, according to an analysis done for the USDA. In 2009 alone, crop insurers enjoyed an astounding 26% rate of return, more than double what was considered reasonable by the industry standard for that year.'"

Questions to Ask About Your Data Privacy Policy

Mapping via infrared spectrum at the one inch level on a field is technology that is already here. The foreign ag service has been using satellite images to predict competing countries yields for decades. That technology is getting cheaper and easier to acquire for private use. Tractors and combines are routinely in communication with GPS locators and mapping programs as farms become more technically advanced. The data that is captured can be used for many purposes.

Read more: "IS THAT EXPENSE AN REPAIR"

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Published: 08 October 2015

Customizing tractors and other farm equipment is not a new idea, infact with some farm operators it is as common as free seed corn caps. I have a Farmall C with a “reverse kit” installed so you face the traditional “rear” of the tractor. Then, a forklift mast was installed. International Harvester company didn’t do that, a short line manufacturer saw a need and met it. I remember my Dad taking the frame of a Massey Harris pull type 72 combine and making into a trailer to haul a D4 Bulldozer and taken the grain head and fabricating a grain cleaner from it.

Now, the tinkering and tweaking extends to the electronic components of the equipment. Chips are available to deregulate horsepower controls, wiring harnesses and programs can be uploaded to equipment in an attempt to make on manufacture’s electronics “talk” to another. The manufactures install Technology Protection Measures or TPM to prevent this tinkering. This reminds me of the manufactures making their hydraulic systems incompatible with one another, which you can still find traces of with Pioneer adaptors on IH tractors.

Over the last twenty years manufacturers have used the 1998 Digital Millennium Copyright Act to assert that buyers have permission (aka a license) to use software that in the equipment sold and that permission doesn’t include the right to tinker with the software. This month U.S. Copyright Office is supposed to rule to clarify how much of piece of equipment’s soft ware you can modify. As it stands, the manufacturers have the law on their side and 120 years of protection from modification of the software. From the on board navigation system in your new SUV to the GPS and the electrical harness of your tractor, this ruling will have a broad impact. However, just like the Waters of the United States rule, the “clarification” is likely going to mean more money for patent lawyers and more gray areas. And gray areas slow innovation and new ideas as lawyers file briefs and motions.

GM, Deere, and others are claiming that without the rules being interpreted their way, they would suffer economic loss through pirating of hard work and research they put into the product, as well increased risk of responsibly in the event of an accident, increased emissions, or poor performance. But 120 years of protection seems along time. Mr

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Published: 08 October 2015

Pop Quiz… Name the only segment of the economy with a division of government devoted to it.  The answer is agriculture. From the regulation of food preparation to the use of food aid as a foreign policy tool, agricultural and the laws surrounding it impacts all of us whether we like to admit it or not.

The term agricultural law may not as common as personal injury law  or divorce law , but make no mistake, agriculture and the law are forever intertwined. It naturally follows that where government is, so will be the lawyers advocating for their client. Much like a farmer, an agricultural lawyer in rural Iowa has to know a little bit about of lot of things related to agricultural law and be willing to know when it is time to get a dedicated specialist. This column will touch on the various segments of agricultural law trends and identify the potential impact on members of the northeast Iowa farm community.

Estate planning, business planning, government farm policy and taxation readily come to mind as legal issues facing the farm community. However, food safety regulations, interpretation of federal pesticide laws, land use regulation decisions and foreign food aid policy have an impact on our local community, often time without knowledge until far after the decisions have been made. For example, one decision by the Supreme Court  applied the government's right of eminent domain to allow a city to take a private citizen's land and after paying for it, turn the seized property over to another private citizen who put it to use for profit.  In the struggle between expanding urban population centers and agricultural land owners, this precedent could be used to the detriment of land owners.  

Read more: Pop Quiz-2015