A provision of the recently signed federal Tax Cuts and Jobs Act allows citrus growers to deduct 100 percent of the cost of replacing damaged trees in the first year.
Previously, growers had to depreciate the cost over 14 years, even though they were allowed an immediate deduction as long as they footed the full cost of replanting. Under the new law, farmers will be able to use this deduction even if they bring in investors to raise capital for replanting costs, so long as the grower continues to own a major stake in the grove.
“Immediate relief is crucial to help Florida orange growers rebuild and get back on their feet,” Rep. Vern Buchanan, R-Longboat Key, said in a press release. “I’m pleased that my bill to help farmers recover from Hurricane Irma and citrus greening has been signed into law.”
Mike Sparks, CEO of Florida Citrus Mutual, said the bill is a first step toward replanting and rebuilding.
“The tax provision will attract much-needed new capital to the industry and the state of Florida at a very critical time for all citrus growers,” Sparks said.
The tax provision will attract much needed new capital to the industry and the State of Florida at a very critical time for all citrus growers.
Mike Sparks, CEO of Florida Citrus Mutual
Even so, the bill is not seen as a panacea for all of the citrus industry’s problems.
Gary Bradshaw, president of SMR Farms, said the bill is a win for the citrus industry but does not address the lack of a cure for citrus greening.
SMR Farms has 920 acres in citrus at Lakewood Ranch, down from about 1,200 acres several years ago.
The declining acreage is due to development at Lakewood Ranch, rather than disease, Bradshaw said.
Citrus growers have learned new ways to get nutrients and water to plants weakened by greening, he said.
“We’re spoon feeding nutrients to the trees and doing the same with irrigation,” Bradshaw said.
Dean Mixon, owner of Mixon Fruit Farms in Bradenton, said the bill will help larger citrus growers, but didn’t think it would be as much help to smaller operations such as his.
Florida Citrus Mutual has warned that as many as 20,000 of the state’s 62,000 citrus-related jobs are at risk. The U.S. Department of Agriculture has forecast the worst orange crop in 73 years.
Buchanan has also worked to provide disaster relief funding to orange growers impacted by Hurricane Irma. A disaster relief spending bill passed the House last month but stalled in the Senate. The funding measure is expected to be back on the agenda this month.