Oregon’s farm tax system is… let’s just say “quirky.” For more than 60 years, the state has offered farmers a tax break by taxing farmland at its farm value instead of its market value. Great idea in theory — until you try to figure out who actually counts as a “farmer” and what really counts as “farming.”

Here’s the thing most people get wrong: Oregon isn’t losing farmland. Almost all EFU‑zoned land originally zoned in the 70’s and early 80’s is still EFU today— over 99%. What we are losing are mid‑sized family farms, the ones that run like real businesses but can’t stay profitable under today’s rules. And you can’t force a farmer to lose money any more than you can force a builder to build for free or a mechanic to pay for the parts to fix your truck.

We need to keep Oregon’s family farms, before they’re gobbled up by mega-farms from out of state. So what do these family farms do? They get creative.

Farmstands. Agritourism. And increasingly: vertical integration— doing the cleaning, prepping, packaging, and selling themselves. It’s smart, it adds value, and it helps them survive. But the tax law hasn’t caught up. Not even close.

Preparation vs. Processing: Ending the Identity Crisis of the Oregon Carrot

Here’s the snag: Oregon says farmers can process their crops, but for property tax purposes processing is treated like manufacturing, not farming. And just to make life extra confusing, no one ever defined what “processing” actually means— while “preparing” crops is clearly considered farming. That missing definition has caused decades of headaches for farmers and assessors alike.

Take Farmer Jones. He grows carrots. Builds a big facility. Washes them, cools them, trims them, sizes them, bags them— even cuts some into “baby carrots”. But through all that? They’re still raw carrots. Yet one day the county tax assessor shows up and says, “Sorry, that’s processing, not preparing,” and tells him his taxes are about to explode. The law is so unclear that neither side can point to a solid answer.

This isn’t just a carrot problem. It’s a statewide, farm‑saving, keep‑families‑in‑business problem.

The good news? OPOA and Rep. Shelly Boshart Davis, daughter of the fantastic private property rights champion, Lori Boshart, are pushing House Bill 4130 in the 2026 session. The bill would finally remove the nonsense distinction between “processing” and “preparing,” meaning farmers could vertically integrate without risking a crushing tax bill.

It’s practical. It’s pro‑farm. And honestly, it’s about time.

The opinions expressed in this post are those of the author and do not represent the opinions or positions of any party represented by the OPOA Legal Center on any particular matter.