While much of the economy struggled through the pandemic, agriculture helped keep the country fed and afloat. Much of ag was also considered essential and avoided the lockdowns that crippled most of the nation. In fact, while most sectors were significantly diminished in production, ag exports to China rose to 55.5 million tons in 2020.

But that does not mean that ag was spared disruption from Covid-19. In fact, even as the vaccine is made widely available and the country starts to re-open, ag is struggling to find a workforce to support the demand.

I believe the Biden administration recognizes the needs of the American farmers and is poised to take steps to address its employment woes, particularly with a focus on making it easier for farms to bring in migrant workers to supplement the ag workforce. The administration’s recent decision to reduce restrictions on H-2A applications from South Africa, after previously suspending entry of non-American citizens from the United Kingdom, Ireland, Brazil and South Africa into the United States, demonstrates that awareness.

New tax incentives were recently introduced to reward farmers for the work they are doing for our country, and now, with the passing of the new Covid-19 stimulus package, there are opportunities for the administration to support American farmers in a more permanent way.

Expansion of the H-2A Program

Agriculture continues to see a growth in employment opportunities across the United States. Migrant guestworkers account for 10% of the one million full-time jobs in crop agriculture. Still, many farmers are struggling to find effective labor and there is growing support to expand the H-2A visa program which grants admission to nearly a quarter of a million temporary nonimmigrant workers for ag employment.

The Farm Workforce Modernization Act (FWMA) has been reintroduced in Congress and it proposes some major changes that could greatly increase the availability of H-2A workers. One of the highlights of the FWMA would be the creation of a Certified Agricultural Worker (CAW) status.

This status would be granted to applicants in the country that can prove at least 180 days employment over the last two years and no criminal record. CAW visas would be renewable and last five and a half years. Those under the 180-day threshold would be able to apply for the standard H-2A. CAWs would also gain a pathway to green card status, and their dependents would be allowed to obtain legal immigration status.

While most of the ag sector was considered essential and thus not subject to all of the lockdown restrictions that crippled most industries, farmers still were faced with disruptions, not least of which was due to delays in processing of H-2A applications. These delays combined with travel restrictions caused ripple effects for farms and ranches across the country.

The FWMA attempts to alleviate issues like this in the future by streamlining the employer petition process, funneling it through a single platform and allowing for a single petition to be used for multiple positions. This would be combined with a requirement that CAW and H-2A employees be registered through the E-Verify program to ensure work authorization. The bill also proposes visa options to allow for year-round employment on top of existing seasonal work options.

The bill’s previous form received bi-partisan support and was widely endorsed by agriculture groups and associations in the U.S. Unfortunately, it died in the Senate in 2019 after passing in the House, but the Biden administration is primed to take action on it and give American farmers the support they are looking for.

New Federal Benefits for Agriculture

My colleague at alliantgroup, former IRS Commissioner Mark Everson, has the type of catchphrase you would expect from the former top enforcer of the IRS: “Pay what you owe…but not more than you owe.”

Unfortunately, farmers are not always aware that many of the broadly available tax incentives are also available to them, and they should be encouraged to utilize these incentives to reduce their financial burden this tax season. One of the often-overlooked ag incentives is Section 41, a research and development credit that rewards farmers who employ technical talent to improve yield and solve problems. For instance, ranchers that experiment with antibiotics to improve herd health or feed mix to increase yield can qualify for one of the most lucrative tax credits available. Likewise, crop producers can qualify based on something as simple as improving irrigation systems or experimenting with alternative pesticides.

It is also worth noting that new IRS guidance indicates that ag businesses can take advantage of the recently revised Employee Retention Credit (ERC). Businesses that had reduced revenue or were impacted by government mandated business suspensions can qualify for credits worth thousands of dollars per employee for each quarter through 2021.

Even if a business is considered essential, their operations could have been impacted during the pandemic, thus allowing them to qualify for the ERC. For instance, if a farm was unable to receive parts and equipment from a vendor due to the vendor being under lockdown orders, the farm may still have suffered a qualifying disruption.

A disruption caused by travel orders and restrictions to H-2A visa applications could also be considered a qualifying government order for the ERC. If an agribusiness had its production effected at a more than nominal level by an inability to hire enough migrant workers due to government orders, that business could qualify all of its employees for the ERC and offset its payroll tax. The credit is also refundable, so if the credit captured is more than the payroll tax liability, a business could receive funds back from the government.

Looking to the Future

It’s vital that American farmers take advantage of the financial support available to them at a federal level this tax season. Beyond immediate relief, the FWMA has the potential to equip the ag industry with the workforce necessary to meet long-term demands. Farmers nationwide are counting on the Biden administration for support moving forward, and I’m confident these initiatives and incentives can create the infrastructure needed for ag success moving forward.

For more news, go to www.agri-pulse.com.

Heidi Heitkamp represented North Dakota from 2013 to 2019 and was the first woman ever elected to represent the state as a U.S. Senator. Heitkamp served on the Senate Committee on Homeland Security and Governmental Affairs, the Committee on Agriculture, Nutrition and Forestry, as well as the Committee on Banking, Housing and Urban Affairs. She is currently the Director of Agriculture at alliantgroup, a tax consultancy.