Arkansas Rep. Rick Crawford introduced a bill Sept. 28 allowing farmers to take disaster preparedness into their own hands.
H.R. 6167, the Farm Risk Abatement and Mitigation Election Act allows farmers to set up tax-deferred farm savings accounts they could withdraw from during difficult times without waiting for disaster declarations and government assistance.
“Farming is a risky business, and we don’t need to look any further than this past August for proof of that. From crop failure, changing markets, insect damage, unusual weather, and natural disasters, producers’ livelihoods are threatened in many different ways,” said Crawford.
Like IRA’s and Health Savings Accounts, Crawford’s proposed FRAME Accounts would allow contributions, capital gains and dividends to be tax-deferred. Farmers would then be able to draw from the FRAME account whenever they needed it to cope with a disaster, independent of government or state designation, which can often be slow in coming.
To encourage initial investment, farmers will be eligible to write-off FRAME account contributions on their tax bill. Contributions will be tax deductible up to $50,000 per year, and farmers will retain 10% of their contributions in the form of a tax credit during the first few years after opening the account.
Source: Rep. Rick Crawford
Watch a video about FRAME accounts here.