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Farmers get financial advice

March 26, 2009|By DAVE McMILLION

SHARPSBURG -- Agriculture still is a big part of life in Washington County, with 844 farms in the county at last count, officials say.

But keeping a farm going can be complicated these days, with slim cash flows and children deciding not to carry on family farms, a financial planner said Thursday night at the Washington County Agricultural Education Center.

The center wants to be a neutral source of information for farmers to help them make the right financial decisions, said Leslie Hendrickson-Hart, an agricultural marketing specialist.

The center can give free information to farmers and steer them to professionals such as accountants and attorneys, Hendrickson-Hart said.

Financial planner Daniel Norris gave farmers tips on what to expect if selling the family farm becomes the decision or how to generate cash flows if farmers decide to stay in the business.

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When farmers sell their land, oftentimes they do not realize they have to pay capital gain taxes on profits they make from the sale, Norris said.

A farmer might be able to sell a farm for $1 million and use that money for retirement, but capital gain taxes might run up to $200,000, Norris said.

Farms often are attractive to housing developers.

Although the housing market is down, Norris said farmers need to be cautious about selling farms for developments in the future.

When the housing market was strong, Norris said Frederick County, Md., was a popular region for farms being sold for development. Norris recalled one farmer in Urbana, Md., who signed a contract to sell his farm.

The farmer did not realize the contract tied the property up for 10 years. At the end of the 10-year period, the farmer could have sold the property for four times more than he initially was given, Norris said.

"That's an important thing. To realize what you have," Norris told about eight people at the seminar.

If a farmer decides to stay in agriculture, possible new income options include agreeing to conservation easements that preserve farm land, Norris said. Under that scenario, a farmer is paid money not to develop land.

Although the number of county farmers is not as large as the number during Washington County's early history, the number has increased in recent years, Hendrickson-Hart said.

The county's current 844 farmers is up from the 775 counted in the 2002 Census, which Hendrickson-Hart attributes to factors such as diversified farming operations.

If you go



What: Financial planning seminar for farmers

When: Thursday, April 23, 7 p.m.

Where: Washington County Agricultural Education Center, Sharpsburg Pike (Md. 65), seven miles south of Hagerstown

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