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April 26, 1999

Vol. 78, No. 17

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Death tax threatens legacy of western family farm

Robert Sakata plans to be a lifelong farmer. His only obstacle is the federal death tax—an impediment he and scores of other American farmers prefer was out of their way.

Sakata, 42, serves as vice president of Sakata Farms, his family's nearly 4,000-acre vegetable farm and packing facility north of Denver. As a partner in the family-owned business, Sakata, a former genetic researcher, handles many of the day-to-day tasks that keep the business running smoothly.

But Sakata has more than the farm chores and health of his crops to concern him. He worries about the future of his family's enterprise. Sakata Farms got its start after Robert's father, Bob, 72 and president of Sakata Farms, purchased 40 acres of

robert

With a major discount store looming in the background and the store´s parking lot abutting his farmland, Robert Sakata examines young broccoli plants.

Colorado farmland after being released from an internment camp for Japanese-Americans during World War II.  The elder Sakata and his wife, Joanna, who handles the finances of Sakata Farms, were recently honored for their commitment to agriculture by being inducted into the Colorado Agriculture Hall of Fame.

"I want to carry that tradition on," the younger Sakata said. "But this estate tax issue will not let me, the way it is presently."

Sakata and his two sisters recognize the threat to the family business. The siblings together have ponied-up thousands of dollars in estate planning expenses and life insurance premiums for their parents. And they fear that the coverage they have may not even cover the value of the farm at the time of their parents' deaths.

Because Sakata Farms is smack in the middle of the fast-growing Colorado Front Range, with new development going on all around it, Sakata says land values in the area are going through the roof. Sakata faces the reality that he and his sisters may have to sell off half of the family farm to pay Uncle Sam unless Congress fixes the problem soon.

"It's a real morbid issue, and yet it has become more of an important issue because of the growth going on in the Denver metropolitan area," Sakata said. "Land values have really skyrocketed. And besides all of the other impacts associated with growth and the impacts and difficulties that it puts on farming in this area, the estate tax will be the toughest one to overcome when my parents do pass away."

The Sakatas have strong ties to their community. They employ about 75 full-time workers, with the staff ballooning to around 400 workers at the height of the vegetable-growing season. Sakata refers to his employees as part of his family—members of the family who would likely lose their jobs if he were forced to sell off part of the farm to pay the death tax.

"I will probably survive. But the most difficult part is that we have some key employees who are third generation," he said. "Some of our key employees have been here 40 years or so. And what scares me the most is it's going to hurt them. We would have to lay some of them off."

Until seven years ago, Robert was working in the booming field of genetic research. But he realized he would have a greater impact on the community by returning to the family farm. Now instead of peering into petri dishes and microscopes, Sakata nurtures vegetables and tracks the nutrient levels of his fertile soil. And that's something he wants to do for a long time.

"Farming is in my blood," he said. "I really enjoy it. I feel good about what I am doing. And it gives me the opportunity to be a part of the community and do something positive."

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