By TIM ALEXANDER
Illinois Correspondent

BLOOMINGTON, Ill. — Though funding created by President Obama’s stimulus package may not be headed to traditional production agriculture, there are several measures that should prove beneficial to farmers and rural dwellers in Illinois.

“There really isn’t much money going into Illinois agriculture from the federal stimulus package,” said John Hawkins, communications director for the Illinois Farm Bureau. “However, money was allocated for (enhanced) rural broadband Internet and renewable energy projects, among other measures beneficial to rural citizens of the state.”

According to the Center for Rural Affairs, Obama’s American Recovery and Reinvestment Act of 2009 provides rural economic stimulus in the form of $20 million for direct farm operation loans from the USDA, with half targeted to first-time farmers. In addition, $30 million is going to the Small Business Administration, which provides loans, training and technical assistance to rural and urban “micro-enterprises,” or owner-operated businesses which employ five or fewer workers.

About $2.5 million will go toward bringing high-speed Internet to underserved rural areas, while funds are also flowing for rural water and sewer grants, housing and community facilities. Another $20 million is allotted for rural Business Enterprise Grants, which support value-added agriculture and small business development.

Rural development, beginning farmer and sustainable agriculture programs which fund the Women, Infants and Children nutrition program are receiving a boost of $500 million in order to meet growing food assistance needs.

Perhaps most notably, massive funding for renewable energy, energy efficiency and updating the national electricity grid is intended to prompt new rural opportunities in wind, biofuel and energy conservation. Obama’s $787.2 billion stimulus bill, approved by Congress on Feb. 12, called for $6 billion in loan guarantees for solar and wind projects and biofuel development, along with $11 billion to update the electricity grid.

According to the Center, nothing was included for land loans to beginning farmers and ranchers, farm energy grants or Value Added Producer Grants. Ian Scott, a spokesman for Illinois Sen. David Koehler (D-Peoria) – a member of Illinois’ Agriculture and Conservation Committee – pointed to notable tax provisions in the Act intended to impact agriculture.

More than 300 changes to the IRS tax code have been made, including an extension of special (or bonus) depreciation and an increase in Section 179 deductions. The Act extends the time period for the 50 percent special depreciation provision, which had expired Jan. 1.

The bonus depreciation extension includes qualifying property purchased and placed in service in 2009. The stimulus package also extends a 50 percent bonus depreciation through tax year 2010 for property with a recovery period of 10 years or longer.
The carry-back period for net operating loss was also modified from two years to up to five years. The provision is only applicable for net operating losses incurred during fiscal year 2008. To find out how these special tax provisions affect your operation, contact your tax preparer.

Phone calls to the Illinois Department of Economic Opportunity inquiring about stimulus money distribution of interest to rural Illinoisans were not returned by press time.