Publication Date - July 2006

NOTE: This guide is current through the publication date. Since changes may have occurred after the publication date that would affect the accuracy of this document, no guarantees are made concerning the technical accuracy after the publication date.

Chapter 3/ Table of Contents / Chapter 5
Tax Code, Regulations and Official Guidance

Chapter Four - Expenses

• Introduction: Farm Business Expenses
• Related Entities
• Capital vs. Reoccurring Costs
• Contract Labor
• Outside Services Informational Sources

Outside Services Informational Sources

Since one of the purposes of this guide is to provide general understanding of farming operations necessary to adapt auditing techniques, there are outside entities which can provide us with a wealth of information and data regarding the farming industry. Listed below are only a few examples of outside services available:

1. University of California Cooperative Extension (UCCE) was established by an Act of Congress in 1914 and serves as an educational arm of the University of California to provide every citizen direct access to its knowledge and resources.
   Staff members of the University of California are stationed in counties as Farm Advisors; Nutrition, Family and Consumer Science Advisors; and 4-H Advisors. They provide practical information to the residents of their county through printed materials, public meetings, demonstrations, newsletters, news media, and individual contacts. The UCCE also prints “cost studies” on different commodities. These publications can be purchased for a small fee or go to http://coststudies.ucdavis.edu. These cost studies are very useful because they cover very detailed information pertaining to a specific commodity. They also publish Interrogated Pesticide Management Guidelines (IPM Guidelines).  This publication also addresses pesticides for specific commodities. The state of California has several Extension Agents in different counties throughout the state.  Check your local area for the nearest office.
2. The County Ag Commissioner’s Office (California) is the office that issues pesticide permits to licensed pesticide applicators. They keep detailed records on such permits. Copies are sent to the state office of Pesticide Resources.  Copies of such public records are available upon written request for a fee. A list of licensed pesticide applicators within the county is also available. Contact the local County Ag Commissioner’s Office for more information.
3. Local Agriculture County Fairs are good sources of information that can provide you with news and information on what is happening in the agricultural community. Different vendors provide free information on commodities via pamphlets, charts, newsletters, videos, slide sets, catalogs, etc.. Agriculture supply vendors set up booths to display their goods and are there to answer questions. Ask the right question and you will be surprised at the information they are willing to share.
4. Gas and Electric Companies can also provide information regarding rebates (refunds) that are available to farmers who qualify for an energy efficiency program. These programs differ each year. So, if you know that the farmer replaced or installed new pumps on their water wells, look for the additional income or offsetting adjustments.
5. Marketing Boards, Crop Associations, and Crop Bureaus are organizations that are formed by and for specific commodities (i.e., Walnut Marketing Board, Nisei Farmers League, Sunkist Growers, Inc., Blue Diamond Growers, Central California Almond Growers Association). A telephone call or written request to the entity might give you the answers to questions you might have regarding the commodity.
6. Agricultural yellow page directories that are published locally are an excellent source of information (i.e. Agriculture Net Yellow Pages). These publications are total agricultural resource guides. They contain names, telephone and fax numbers of vendors for Ag resources (i.e. suppliers, services, etc.). The vendors that are listed on the publication paid for such advertising but don’t overlook this resource because other important information is enclosed. The publications also includes listings for Ag Associations, Government Agencies and Universities. A few are listed below:
   
   

   a. State Government - State Department Food and Agriculture
   b. Federal Government:
   c. Bureau of Land Management

7. Bureau of Reclamation

   • Universities:
   • Crop Improvement Association:
   • Institute for Rural Studies
     
8. University Cooperative Extension
9. National and Local Ag Insurance Companies can be contacted for general information pertaining to crop damages. They sometimes keep charts on crop damages. They can provide you with additional information regarding rate changes, other crop events, etc. 
10. Don’t forget one of the most reliable sources is the third-party letter. For example - A Revenue Agent (RA) who used such a source was able to confirm that the farmer under examination had planted new grape vines. They took a photocopy of a purchase invoice from a vendor that specialized in soil fumigation using the chemical Methyl Bromide. The RA then mailed a copy to the vendor requesting that the vendor provide a copy of the work order and a map of the application site(s). The Revenue Agent used their knowledge that the chemical Methyl Bromide is used to control soil nematodes in site preparation for a new vineyard. The RA had obtained this information from the Cost Studies pamphlet that the University of California Cooperative Extension Fresno County (UCCE) published.