Rep. Landry proposes farmers savings accounts

Rep. Jeff Landry (R-La.) proposed legislation Friday that would let farmers save up to 20 percent of their income into a tax-deferred account to help them manage their own financial risks.

Landry is one of several members of Congress who were not pleased that Congress failed to move a bill allowing for the full extension of federal farm programs before the August break. On Friday, Landry said Congress shouldn't wait for that bill to be sorted out.

"Washington politicians have once again let our farmers down, failing to pass a Farm Bill," he said. "But I'm not going to just wait around for Washington to fix our problems; I'm searching for innovative solutions to help our farmers manage their own risk."

While the farm bill will likely provide an extension of federal aid programs for agricultural producers, Landry's bill would allow these producers to take steps on their own to manage their farms. Under his bill, H.R. 6276, farmers could set up an IRA-like account that they could draw from during times of need.

The proposal would let farmers move up to 20 percent of their income to a tax-deferred account, and to use those accounts to cover losses, equipment purchases and other needs. The funds would have to be spent within 10 years or face a 10 percent penalty tax, and would be taxed at normal rates as they are withdrawn.

"This year has proven those in the agricultural and fishing industries live in fear of losing their operations due to droughts, disease, and other disasters," Landry wrote in a "Dear Colleague" letter introducing members to the bill. "My legislation would give these industries an innovative new tool to ensure they have the resources necessary to weather these periods of decreased income.

"The accounts created by this legislation would provide an important way for individuals involved in these industries to manage their own risk, allowing them literally to save for a rainy day."

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