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Senate Bill Introduced to Establish Tax-Exempt Agricultural Research Organizations

September 19, 2011 |

New legislation that would amend the tax code and allow for the creation of a new type of charitable, tax-exempt agricultural research organization has been introduced in the Senate. The “Charitable Agricultural Research Act,” (ARA) is intended to “complement existing public and private research and also create the opportunity for previously under-funded projects to be fully funded, such as projects addressing specialty crops or specific diseases,” according to a news release.

Modeled on the charitable, tax-exempt medical research organizations that have been in existence since the 1950s, the ARA was introduced by Senator Debbie Stabenow (D-MI), chairwoman of the US Senate Committee on Agriculture, Nutrition and Forestry, and Senator John Thune (R-SD), a committee member.

US farm productivity has increased 158% since 1948, with annual US agricultural production having reached $312 billion and exports totaling $108 billion, according to the USDA Economic Research Service. Senators Stabenow and Thune say that that success, as well as agricultural sustainability and US food safety and security, is threatened by a lack of investment in research and development. Enabling the creation of charitable, tax-exempt agricultural research organizations (AROs) that leverage private donations will help remedy the situation.

Chairwoman Stabenow stated that,”Research is critical in protecting the health and welfare of our rural and farming communities and expanding our agriculture economy.” Stabenow continued: “American agriculture outpaces and outperforms every other nation in the world because of decades of research – learning how to be more efficient, innovative and productive with fewer resources.¬†This productivity has created an American agricultural sector that’s 16 million jobs strong. This is a ‘win-win’ effort that builds on decades of success and momentum by continuing to pursue new research – and doing so in a cost-effective way by engaging the private sector.”

Government funding for agricultural R&D has lagged that of other economic sectors for decades, and current fiscal strains threaten to reduce them further, co-sponsor Sen. Thune pointed out. Government funding for agricultural research at US land grant universities has been almost flat and the outlook for increased funding is not bright, he noted.

“In the current tight budget environment, I am pleased to introduce this bill with Chairwoman Stabenow to provide a new option for financing agricultural research,” said Senator Thune. “Production agriculture’s current economic strength is a direct result of research that-among other things-has increased crop yields, made livestock healthier, and made food safer. Our bill will facilitate the transfer of much-needed private funding to agricultural research, helping to prevent innovation from stalling due to funding shortfalls.”

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