Farmer co-ops and private grain operators at odds over tax law

Farmer co-ops and private grain operators at odds over tax law
Feb 09, 2018

Section 199A gives farmers a 20 percent deduction on payments for crop sales

By Diego Flammini
News Reporter

U.S. legislators are trying to find a solution that will satisfy both farmer-led and privately owned grain operators.

Section 199A of the Tax Cuts and Jobs Act of 2017 gives farmers a 20 percent tax deduction of gross sales if they market their crops to a cooperative.

But the same deduction doesn’t apply to privately owned grain companies.

Lawmakers are trying to find a suitable middle ground between both parties, but that’s proving to be difficult.

“What we found was … trying to get both of them to agree on final language has been a real challenge,” South Dakota Senator John Thune told reporters yesterday, according to Reuters.

And grain organizations are encouraging Congress to find a solution sooner than later.

The National Grain and Feed Association, which represents both cooperatives and privately owned grain companies, continues to wait for a resolution.

“All concerned are very cognizant of the adverse and unforeseen disruptions Section 199A already is having in the marketplace and the perverse impacts it is having on companies’ business decisions,” said Randy Gordon, the organization’s president, according to Reuters.

And the National Council of Farmer Cooperatives hopes an agreement can be reached that “maximizes farmers’ economic returns during these trying times in rural America while maintaining the competitive balance that existed before passage of the tax reform bill,” Council president Chuck Conner said in a statement.

Farmers have inquired about transferring their crops from private elevators to cooperatives, Reuters reports.

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