'Big beautiful' bill brings new protections to owners of farmland

With the signing of the Big Beautiful Bill by President Trump, a new law is now in effect that aims to reduce the tax burden on selling farmland, encouraging farmers to keep their land in agricultural production.

Senator Mitch McConnell introduced the legislation in March with support from the Kentucky Farm Bureau.

Their Kentucky Farmland Transition Initiative aimed at uncovering ways to help farmers transition acreage to future generations of farmers.

KFTI found that farmers tend to hold onto their land to avoid paying capital gains taxes on their property. The Protecting American Farmlands Act would defer the capital gains tax over a four-year period if land is sold to a farmer who will keep it in agricultural production for a minimum of 10 years.

The need for such legislation is underscored by 2022 findings from the USDA Census of Agriculture:

Over the past 20 years, Kentucky farmland acreage has declined from 13.8 million acres in 2002 to 12.4 million acres in 2022.

In just the last five years, Kentucky lost 546,000 acres of farmland, an average of 290 acres lost per day. 

In the last five years, the number of farmers in Kentucky has decreased 9%.

The number of farms in Kentucky has decreased from 86,541 farms in 2002 to 69,425 farms in 2022.

The average age of a Kentucky farmer is 57.1 years old, and approximately 1.3 million farmers nationwide are now at or beyond retirement age.