From time to time my office distributes press releases and written statements on state and national issues, debate in the Senate, and legislation that I am working on. For your convenience, I post these documents on my site for your review.
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Sessions Proposes Farm Savings Accounts to Help Producers Self-Insure Against Future Losses
Under the plan, the United States Department of Agriculture (USDA) would establish Farm Savings Accounts, an investment and risk management tool to allow farmers to make tax-deferred payments in an interest bearing account that could later be used to offset farm losses caused by high fuel prices, low commodity prices, or natural disasters.
Sessions’ plan would authorize the USDA to provide a matching contribution equivalent to two percent of the farmer’s average gross income over the last three years. Funds in the savings account would be invested in low-risk securities such as certificates of deposits or government securities.
Additionally, contributions into the savings account would be tax deductible and any interest earned on the account would be exempt from capital gains taxes.
“I have spoken with farmers across the state about their experiences during this unprecedented drought in the Southeast, and one thing I often hear is that the existing crop insurance programs are not getting the job done,” Sessions said. “Farm Savings Accounts will give hard-working farmers a risk management tool that allows them to control their safety net when disasters strike, rather than depending on a slow federal bureaucracy.”
Producers would be allowed to withdraw funds from the account any time their gross annual income is less than 80 percent of the average gross income from their most recent three crop years. Withdrawal of funds from the account would be restricted to the amount necessary to bring the account owner’s income up to 80 percent of the producer’s three year income average.
“The money that we currently spend to subsidize crop insurance could be better put to use as a match against a farmer’s own personal investment, helping to give them the security they need to get through tough years and the certainty they need to run a profitable farm business,” said Sessions.
Farmers who open a Farm Savings Account would be allowed to purchase additional crop insurance, but that insurance would not be subsidized by the federal government.
Sessions said he would work towards including the proposal in comprehensive farm policy legislation that is expected to be considered in the Senate later this month.
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