The Illusion of Ag Exemption

I have been looking at properties as potential investment opportunities lately, and the term “Ag exempt” has come up on several occasions. In this case, it refers to the tax rate applicable to a property, but it has got me thinking about the idea in other contexts as well.

I might irritate some people in the Ag industry with this post, but I think it conveys an important idea. Agriculture is not exempt from the realities of commerce that other businesses face. Agricultural production is a noble endeavor—there is no doubt about it. We produce food for the world, which is obviously a seriously important task. More importantly, we steward the land for all of humanity. My personal views on land ownership differ from those of many people. I believe that no one human can truly own land; we can only purchase or lease the right to steward that land for a defined period of time. That’s a significant responsibility that I am blessed to take on.

The Ag industry has long been viewed through an idealistic lens, and we do embody many idealistic values and practices. I feel incredibly fortunate to be in this industry and to raise my family within it. However, we sometimes give ourselves too much credit as farmers and ranchers. As I write this, I glance at our weather station monitor, which reads -30 degrees Celsius. That’s COLD, regardless of whether you measure in Celsius or Fahrenheit! I am reminded of numerous Facebook posts declaring that, despite the cold weather, farmers and ranchers will not be shutting down operations today! It’s often stated in a way that suggests everyone else is taking the day off. Here’s a newsflash: I don’t think farmers and ranchers are the only ones working today. Farming and ranching come with many unique challenges, but the benefits far outweigh them. I am very hesitant to place myself and other farmers on a pedestal above other industries despite our valiant pursuit of food production for our fellow man(woman).

It seems that some farms and ranches feel that because they had incredibly enterprising forefathers who risked life and limb to settle their operations, future generations should have the right to hold onto that land and operate it as they wish, regardless of what their customers may want. There is a sentiment that everyone should have the opportunity to own land and become a farmer; that the barriers to entry into the industry need to be lowered to allow more opportunities for everyone.  That’s an unrealistic expectation in free market capitalism; which is an imperfect model, but it’s the best one we have come up with so far!  Let’s say that I want to produce airplanes for a living; it’s always been a dream of mine, and I think I should have that opportunity. Should Boeing be forced to subsidize my venture into that industry? I don’t think that seems very reasonable.

Farms and ranches are not exempt from the pressures of a free market economy. As margins tighten—and they always do in the commodity production industries—it becomes increasingly important for farms and ranches to have a business structure in place that allows them to be proficient in all areas of business. Most Ag businesses are competent or even excellent at operations but often bumble and fumble their way through finance, HR, marketing, strategy, and more.

Ag businesses are not exempt from the realities of business and need to have a framework for building a well-rounded enterprise—one that understands the value it creates, knows where it is headed, and has a plan for how to get there while building a team to make it all happen.

I have great reverence for the courage and drive that my ancestors demonstrated when they settled this new land and built something I get to partake in. It was not their birthright to own this land; they had to innovate, take risks, and be willing to do incredibly uncomfortable things for the right to steward over it.  It is not my birthright to continue to steward this land. I must continue to innovate and take risks that are uncomfortable. The systems I have built my business around will allow me to do that so that I can continue to steward our land for my fellow man and for future generations.

All businesses need systems to operate at an efficient level; we are not Ag exempt! Installing a simple framework for your business, like the P.O.P.S. system, will allow you to focus on what you do best—stewarding the land and producing food for a growing world.

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