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Congress has added another wrinkle to the Tax Code which may have a substantial impact on taxpayers who are not on the cash method of accounting or whose farming operation is not deemed to be a trade or business. Late in 1999 Congress substantially narrowed the availability of installment sale reporting by denying this election for many taxpayers. This change for installment sale reporting went into effect as of December 17, 1999.
The good news is the new law provides an exception to the denial of installment sale reporting for cash basis taxpayers and/or for property used or produced in the trade or business of farming.
The bad news -- the primary area of concern is for landlords who rent their farmland on a cash or crop-share basis. Congress has increased the ante and the need for a determination of whether the landlord’s farm rental is a "trade or business". At risk is the availability of installment reporting for the sale of commodities and farm property.
This new wrinkle further compounds the "trade or business" issues dealing with cash rental payments between spouses, separate entities and their major owners, and CRP payments. Hopefully, we can get Congress to legislate some clarity for these issues – but I’m not going to hold my breath or go on a hunger strike until it happens!
If you are paying cash rent to a spouse or family controlled entity, receiving CRP payments, or are a farm landlord on the accrual method of accounting, it is suggested you discuss these rent and installment sale issues with a tax professional.
(Author: Parman R. Green, Farm Business Management Specialist, University Outreach and Extension)
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Recently, non-target effects of Bt corn have become the subject of a great deal of debate and this debate has fueled opposition to Bt corn and genetically modified crops in general. Non-target effects, however, are not all bad. In fact, we have found that Bt transformation of corn hybrids can actually enhance their safety as food products because Bt corn hybrids are significantly less likely to contain harmful mycotoxins than their non-Bt counterparts.
When insects attack corn plants, one result is an increase in diseases. This occurs because insect pests carry pathogenic fungi and predispose plants to disease development. These diseases include ear rots and stalk rots that can reduce corn yield and quality. Some of the diseases are caused by fungi that produce mycotoxins in the corn crop. Mycotoxins, which are toxic compounds produced by fungi, pose a significant problem worldwide, affecting an estimated 25% of grain crops.
The major mycotoxins in corn include aflatoxins, produced by fungi in the genus Aspergillus, and fumonisins, produced by several species of Fusarium fungi. Both aflatoxins and fumonisins can be fatal to livestock and are probable human carcinogens. The importance of fumonisins in human health is still a subject of debate, but they are carcinogenic to laboratory animals and there is evidence that they contribute to human cancer in some parts of the world. Fumonisin concentrations in corn are or will be under regulatory scrutiny in several nations. The economic impact of aflatoxins has been greater than that of fumonisins because many nations already have regulations on allowable aflatoxin concentrations in crops. Symptoms of Fusarium and Aspergillus ear rots are often highly correlated with insect damage.
Since 1994, we have been studying the influence of Bt expression on Fusarium ear rot and fumonisins in corn. In these studies, differences among types of Bt genes (or Bt events) have become evident. All Bt events are not alike. They differ in the specific Bt protein they express and in the tissue-specific expression of the proteins. Kernel expression of Bt proteins appears to be an important factor determining the amount of kernel feeding by European corn borer larvae and subsequently the intensity of Fusarium infection.
Results of our studies have consistently demonstrated that hybrids containing two of the Bt events (MON810 and BT11) experience significantly less Fusarium ear rot and yield corn with lower fumonisin concentrations than their non-Bt counterparts. Similar results have been obtained in studies conducted in Illinois and North Carolina (1, 2, 3). When conventional hybrids were subjected to high populations of European corn borers, Fusarium ear rot severity and fumonisin concentrations became elevated, often to levels considered unsafe for swine and horses. Levels considered safe for horses and swine are <5 ppm and <10 ppm, respectively.
Safe fumonisin levels for humans are unknown (4). Fusarium ear rot and fumonisin levels in MON810, CBH351, and BT11 hybrids were uniformly low (usually less than 10% of the concentrations in the non-Bt hybrids) and were unaffected by European corn borer populations.
Other studies also have shown reduced kernel infection by A. flavus and lower aflatoxin concentrations in BT11 and MON810 hybrids compared with their non-Bt counterparts. However, these reductions have been less dramatic than those seen for fumonisins (5).
Although the results described here support the utility of Bt hybrids for management of Fusarium and Aspergillus ear rots and stalk rots of corn, it should be emphasized that these diseases all require an integrated management approach involving other tactics. When conditions are very favorable for disease, protection from insect damage may not be enough. Another limitation of Bt corn hybrids is their spectrum of activity. Currently available events are not effective against the full spectrum of insects that can contribute to kernel damage and subsequent mycotoxin contamination.
Future directions of Bt hybrids can be an important tool in the integrated management of Fusarium and Aspergillus ear rots. New Bt hybrids now under development promise to exhibit more complete control of other kernel-feeding insects, so they should provide even better protection from insect-associated fungi, and there could be further contributions toward mycotoxin management.
Transgenic control of insects and diseases offers an alternative that is much more effective, consistent, economical, and environmentally sound than foliar insecticides. Debate surrounding the use of genetically modified crops should be based on an assessment of all risks and benefits that can be measured, including environmental impacts, livestock impacts, and potential human health threats. Available data show that Bt transformation of corn hybrids enhances the food and feed safety of the grain by reducing its vulnerability to mycotoxin-producing fungi. A common criticism of currently available genetically modified crops is a lack of apparent benefits to consumers. But lower mycotoxin concentrations represent a clear benefit to consumers of Bt grain, whether the intended use is for livestock or human food products. Consumers and regulatory agencies should consider these factors in decisions regarding Bt corn use.
Author: Gary P. Munkvold (Department of Plant Pathology, Iowa State University), and Richard L. Hellmich (USDA-ARS Corn Insects and Crop Genetics, Research Laboratory & Iowa State University.)
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Recently, Frito-Lay announced that it was telling its suppliers to not use GMO (genetically modified organism) corn. This action was said to be in response to consumer concerns. No other reasons were given. While anti-GMO groups praise the decision, others question the motive--especially without more specific reasons.
Last month in Montreal, representatives of 130 nations signed a "Biosafety Protocol" agreement. The ultimate impact of this agreement is unclear and it must first be ratified by 50 nations. It contains provisions to label grain shipments that "may contain" genetically modified material (this could include most of the grain currently exported that has not been segregated as non-GMO). It's unclear whether protocol provisions require segregation of GMO. It also appears to allow countries to ban GMO, but it claims not to override World Trade Organization (WTO) rules. WTO rules require countries to base food import restrictions on "sound science." Many expect Europe to insist on labeling and possibly imports could be banned on "precautionary principles."
Do the above actions represent consumer demands and loss of export markets? Or are they just more headlines based on a lack of knowledge that only affects small or insignificant markets?
Produce what the consumer wants! That's usually sound economic advice, but what does the consumer want? Most anti-GMO activists would have everyone believe that consumers don't want GMO. Food companies telling suppliers they don't want GMO grain and potential import bans seem to back this up. But consumer desires should be communicated through the market--what's happening there?
So far, the market signals really don't indicate a lack of markets beyond some limited preferences for non-GMO. Safety tests have shown that GMO grains aren't really different than other grains. Roundup ready soybeans are approved for exports in Europe and other countries. Some Bt corns aren't approved for European markets, but this isn't a large US export market and there is plenty of non-GMO or approved Bt varieties to meet this need. Much of the non-GMO demand or companies (like Frito-Lay) not wanting GMO represents specialty markets that are often supplied under identity preserved contracts. Most Midwest grain merchandisers have said they plan to buy both GMO and non-GMO grains planted in 2000.
GMO issues need to be monitored closely whether they are perceptions or based on scientific evidence. The GMO issue still makes headlines, but business decisions should be based on market signals and production economics--not headlines. So far the markets don't signal much in the way of non-GMO premiums, discounts for GMO or a lack of markets.
(Author: Melvin Brees, Farm Management Specialist, University Outreach & Extension)
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Acreage should be planted to 20% non-Bt corn and no spray for European Corn Borer (ECB)
The corn needs to be planted close enough to the Bt corn so ECB intermate (if any survive on Bt)
There are also some scouting requirements and responsibilities for seed companies. You should contact a corn seed person and ask for a copy of their agreement that buyers are required to sign, and any information they require buyers to read.
Caution: grain from this refuge will likely be contaminated by pollen from the Bt corn, so if segregation of grain at the market is required the refuge corn should be included with the GMO grain, not the non-GMO grain.
Reminder:
Check the grain in your bins. High fall temperatures caused much of it to be put in at
higher than normal temperatures. Run fans and smell the air, check temperature of the
grain to determine current condition. Check for moldy or spoiling grain at the top of the
bin. Grain should be checked every few weeks.
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Cole County
April 4 & 5
Contact Cole County NRCS Office @ 573-634-7979
Pettis County
April 11 & 12
Contact Pettis County NRCS @ 660-826-3354
Callaway County
April 13, 14, & 15
Contact Callaway County NRCS @ 573-592-1400
Saline County
August 1 & 2
Contact Saline County NRCS @ 660-886-5773
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Ask for MP575 "Weed Control Guide for Missouri Field Crops". It is available at your local University Outreach & Extension Center for $7.50.
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Publishing Information
Ag Connection is published monthly for Northeast and Central areas of Missouri producers and is supported by the University of Missouri Extension, the Missouri Agricultural Experiment Station, and the MU College of Agriculture, Food and Natural Resources. Managing Editor: Mary Sobba.
Send comments and suggestions to:
Mary Sobba, Agriculture Business Specialist
101 N. Jefferson St., Rm 304
Mexico, MO 65265
(573) 581-3231
sobbam@missouri.edu
