The federal government is continuing to make adjustments to its tax reform proposal.

On Thursday, Finance Minister Bill Morneau addressed concerns raised by farmers and fishers.

Agriculture Minister Lawrence MacAulay joined Morneau for the announcement, which will see the government drop its measure that would have restricted the conversion of income into capital gains.

This proposal would have made it more difficult for farmers to pass their businesses to their children.

Morneau announced earlier this week that the government will also scale back a proposal to crack down on passive investment income.