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New Tax Plan Could Help Citrus Growers Replant

Larry Black's family has grown oranges at the Peace River Packing Company for five generations.

 
Driving through his groves in Fort Meade, Black points out all of the trees that are infected with the disease known as greening. 
 
He pulls over at a grove of recently planted trees. 

 
"Virtually every tree in the grove has greening infection at some level," he said.

Greening disease can cause trees to become stunted and produce green fruit that is too sour to sell. It has more than halved citrus production in Florida over the last decade.

Many farmers like Black have found new technologies and growing techniques to combat the disease. They were expecting an increase in production this year, but then Hurricane Irma hit and cut orange production in half again.

A U.S. Department of Agriculture report said Florida's citrus production would reach a 73-year low following the hurricane.

A new tax incentive is aimed at helping struggling farmers replant trees lost to disease and natural disaster. Andrew Meadows, director of communication for the trade group Florida Citrus Mutual, said the new bill will help farmers with the cost of planting and give some guarantees to outside investors.

"It may sound simple, but trees are the lifeblood of the industry," he said.

U.S. Representative Vern Buchanan (R-FL) attempted to pass the Emergency Citrus Disease Relief Act for nearly three years. The proposal finally passed late last month, tacked on at the last minute to the Republican tax overhaul.

Under current law, farmers take on the cost of replanting trees and can only deduct those expense over the course of 14 years. The new law will allow farmers to receive a deduction on the full replanting cost in the first year.

“Florida orange growers have been hit hard by crop disease and Hurricane Irma, so we need to help them rebuild and get back on their feet,” Buchanan said.

Black says the new law is necessary for the industry, especially when new growing techniques to combat greening have led to higher replanting costs.

"This [bill] is going to allows us to consider replanting as soon as 2018," he said. "We can be more aggressive with our replanting plans and get our production back to pre-greening levels."

Black said it is also important to note that the new tax plan is not an increased deduction, just a different schedule. Farmers will still pay the same amount of money in taxes.

Credit Roberto Roldan / WUSF Public Media
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WUSF Public Media
The Florida citrus industry has been locked in a decade-long battle with citrus greening disease.

Another part of the bill allows for growers to receive a tax deduction for replanting costs even if they sell a portion of their company to raise funds. Growers must still maintain a 50 percent share of their company.

Meadows says this measure will allow citrus farmers flexibility in how they finance replanting. He says the bill will also make the citrus industry more attractive to investors who were worried about losing money to greening disease.

"There are lots of people out there that are sort of looking at us and seeing what we are going through," he said. "We are hoping that this tax bill pushes them over the brink and get's that capital here."

Florida citrus growers are continuing to lobby for a federal relief package for Hurricane Irma that is currently stalled in the U.S. Senate. Florida's citrus industry lost an estimated $2.5 billion from the hurricane.

Roberto Roldan is a senior at the University of South Florida pursuing a degree in mass communications and a minor in international studies.
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